What’s an Assignment Clause?

An assignment clause is a part of a contract. It says whether the people in the contract can give their part of the deal to someone else. That’s called “assigning” the contract.

Why It Matters

See, when you sign a contract, it’s usually just between you and the other person. Like, let’s say you’re renting an apartment. You sign a lease with the landlord. The lease is the contract that says you can live there as long as you pay rent and follow the rules.

But what if the landlord decides to sell the building to someone else? Can they just hand your lease over to the new owner? That depends on the assignment clause.

Types of Assignment Clauses

There’s a few different types of assignment clauses that could be in your contract:

No Assignment Allowed

Some contracts straight up say “no assignment allowed.” This means the contract is only between the original people who signed it. They can’t give their part of the deal to anyone else.

So if your lease says the landlord can’t assign it, then they can’t just sell the building and make you deal with a new landlord. The lease would still be between you and the original landlord.

Assignment Allowed

Other contracts are cool with assignment. They might say something like “either party can assign this contract.”

If your lease has a clause like that, then your landlord could sell the building and assign your lease to the new owner. Then you’d have to pay rent to the new landlord and follow their rules.

Assignment with Notice

Some assignment clauses are in the middle. They say assignment is allowed, but the person doing the assigning has to give notice to the other person first.

Like, your lease might say the landlord can assign it, but they have to tell you in writing 30 days before they do. That way you’re not surprised by a new landlord out of nowhere.

Why Would You Want to Assign a Contract?

There’s a bunch of reasons why someone might want to assign a contract to someone else. Maybe they’re selling their business and want the new owner to take over their contracts. Or maybe they’re just tired of dealing with the contract and want to hand it off to someone else.

Example: Cell Phone Contracts

You know how you can sign a contract for a cell phone plan? You agree to pay a certain amount each month, and the cell phone company agrees to give you service.

But let’s say you decide you don’t want that phone anymore. You want to switch to a new provider. Can you just assign your contract to your friend so they can take over your payments and get your phone?

Probably not. Most cell phone contracts have a “no assignment” clause. They only want to deal with the person who originally signed up.

What Happens if You Try to Assign a “No Assignment” Contract?

If you try to assign a contract that says “no assignment,” it usually won’t work. The other person can just say “nope, that’s not allowed” and refuse to deal with the new person you assigned it to.

In some cases, trying to assign a “no assignment” contract can even get you in trouble. It might be considered a breach of contract. That’s when you break the rules of the contract. The other person could sue you or cancel the contract altogether.

How to Know if You Can Assign Your Contract

The best way to know if you can assign a contract is to read it carefully. Look for the assignment clause. It’s usually towards the end of the contract, sometimes under a heading like “Miscellaneous” or “General Provisions.”

If you can’t find an assignment clause at all, then usually that means assignment isn’t allowed. Most contracts include an assignment clause if they want to allow it.

If you’re still not sure, you can always ask a lawyer. They can read over your contract and explain what it means.