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 What Does it Mean to Assign Contract Rights?

“Assignment” is the transfer of rights to another party. For instance, if a contract entitles you to obtain $100 for painting a house, you can transfer the right to accept that money to another individual.

What is Contract Drafting?

To fully understand the concept of contract drafting, it may be useful to know what a contract is first. A contract is generally defined as a legally binding agreement between parties that acknowledges the arrangement’s rights and obligations. Contracts can be created through writing or created by oral agreement. For contract drafting, this only refers to written agreements.

Contract drafting is the action of writing down the terms and conditions of an agreement. The parties to a contract may go through several drafts and negotiation sessions before the official contract is finalized. Contract drafting seeks to form a legally binding document in writing that is precise, straightforward, and as close to the parties’ intentions as possible.

The drafting process can be very useful for contractual agreements. One advantage of the process is that it permits the parties to examine the terms of the contract before it becomes binding. This can help stop legal arguments over the contract from arising in the future. If a legal quarrel occurs, it can also prove the parties’ original intentions and obligations.

Contract drafting can ensure that the parties comprehend their respective responsibilities and serve as guidance if any problems arise while they satisfy the contract. This is especially true in cases where the contract involves complex conditions.

How Are Contracts Drafted?

Although any person may draft contracts, it is often recommended that a lawyer draft and inspect the definitive terms to ensure that the contract is legally correct and binding. The parties to a contract will usually be the ones to determine how a contract will be drafted, but it can also hinge on the type of contract being created.

For example, employment contracts contain specific provisions and distinct terms that differ from the language found in confidentiality agreements.

However, most contracts follow a raw format. They include standard components, such as essential words that need to be defined, legalese that indicates the beginning or signals the end of a contract (e.g., a signature block), the privileges and responsibilities of the parties, how the parties can terminate the agreement, general provisions, and some incorporate special clauses (e.g., insurance policies).

In addition, regardless of the type of contract, all contracts must include the following details:

  • An offer;
  • The acceptance of that offer;
  • Consideration (usually money);
  • The contract must identify its parties, and those parties must possess the legal capacity to agree;
  • The subject matter of the contract must be legal (e.g., cannot create a contract to employ an assassin);
  • There must be a mutual agreement between the parties; and
  • The parties must have a mutual understanding of their privileges and obligations under the contract.

Many contracts also contain explicit terms and conditions. Some standard contract drafting terms and conditions include:

  • Force majeure;
  • Arbitration clause;
  • Indemnification;
  • Assignment;
  • Confidentiality;
  • Warranties;
  • Choice of law and forum selection;
  • Time is of the essence clause;
  • Severability; and
  • Liquidated damages clause.

The above terms and conditions all pertain to either circumstance that triggers conditional consequences, duties that the parties are lawfully obligated to enact, or duties that the parties must refrain from, or they risk breaching the contract.

What Is Contract Review?

Legal contract review refers to when a party to a contract employs an attorney to check the terms and conditions of their agreement. It is strongly suggested that an attorney conducts this examination before a party signs the contract. An attorney should also be consulted to check a contract when there is a legal quarrel concerning the contract. They will know what to look for and will understand precisely how to review an agreement.

Having an attorney check the contract can protect a party against future or current legal disputes in both scenarios. The contract is typically the most crucial evidence in a legal issue. It is usually the first document conferred, regardless of whether the matter is settled before a court or outside a courtroom.

During a contract review, an attorney will look for specific items, such as whether the contract is written, provides unambiguous terms, contains straightforward language, or defines technical jargon, and whether it complies with the law. An attorney can also ensure that a party comprehends their duties and responsibilities under the contract and can modify or amend provisions that the party did not intend to include in the agreement.

What Are the Advantages of Employing a Lawyer to Draft or Review a Contract?

There are several benefits and disadvantages to hiring a lawyer to prepare or review a contract.

Some benefits of hiring a contract review attorney may include:

  • Preventing a future breach of contract issue and other legal quarrels;
  • Bypassing the chances of forming an illegal, immoral, or voidable contract;
  • Formulating a clear understanding of the responsibilities and duties of all parties;
  • Ensuring that all terms and conditions in the contract are what the parties planned;
  • Incorporating other terms and conditions in the agreement that a party may have left out could be beneficial to them; and
  • Identifying protections or rights that a party has, which can be used either as a defense in a lawsuit or to take legal measures against another breaching party.

When Is Assignment Permissible?

Parties are generally free to assign their rights under a contract, but specific exceptions may apply.

Assignment cannot expand the obligations of the other party. For instance, suppose a manufacturer contracts to provide sweaters to a store in the same city as the sweater factory. In that circumstance, the other party can’t assign the sweater delivery to a different store in another state because it would impose a greater obligation on the manufacturer than was initially bargained for.

Parties can draft the contract so that assignment is restricted. You should look over your contract to see if it expressly forbids assignment.

What Is Delegation of Duties of a Contract?

On the other hand, delegating duties transfer the obligations of a contract. The contract requires you to perform some duty, and you want someone else to perform it instead.

When Is Delegation Permissible?

In general, the delegation of duties under a contract is allowed. However, like with assignments, there are exceptions.

Delegation is not permitted when it would change the nature of the agreement. For instance, suppose a party hires a renowned chef to cook for a wedding. In that circumstance, the chef cannot delegate the duty to cook to someone else because the party has contracted explicitly for this chef’s experience and individual skill.

It is typically not permissible to delegate the promise to repay a debt.

Parties can also draft into the contract that delegation will not be permitted. You should look at the contract to see if there is a restriction on the delegation of duties.

Is Consent Required?

Consent to assignment or delegation is not required unless the contract so states. Again, it would be best if you looked at the language of your agreement to specify whether or not the other party’s consent is required before you can assign rights or delegate duties.

Do I Need a Lawyer for Assignment and Delegation?

Contracts are a complex area of law, and the applicable rules of assignment and delegation will differ from state to state. A contract attorney experienced in contract law or business contracts can help you decide whether or not an assignment/delegation is allowed and under what circumstances.


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