Assignment of contract

Assignment of contract refers to the transfer of contractual rights from the original contracting party (known as the assignor) to a third party (known as the assignee). The general rule of assignment is that only contractual rights can be transferred, but not contractual obligations or burdens – unless the contract or a statutory provision otherwise authorises this.

Therefore, upon the assignment the assignee is entitled to the benefits of the contract and can enforce their rights against the other party, but the assignor remains liable for their obligations under the original contract.

A party to a contract has a general right at common law to assign its rights without the other party’s consent or approval, but they must send a notice of assignment to the other party. However, contracts often have a provision that a party can only assign its rights under the contract with the other party’s consent to prevent unilateral action without their consent or knowledge.