Introduction

The legal phrase “Assignment” means the act of transferring rights or advantages from one person to another. The person who transfers the assignment is known as the assignor and the one to whom it is transferred is the assignee. In other words, the ‘assignor’ is the party who currently has the rights and obligations of the existing contract, and the ‘assignee’ is the party to whom they are assigned and who will take over the position.

Without the express consent of the assignee, an assignment may not transmit a responsibility, burden, or disadvantage. The right or benefit being assigned could be given as a gift or paid for with a fee like money. An assignment is a part of both Contract Law and Property Law.

There are two kinds of Assignments:

• Legal assignment – An assignment that complies with the formalities, intent to assign, communication to the assignee, and notice to the debtor provided in Section 130 of the Transfer of Property Act, 1882.
• Equitable assignment – When the conditions of a Legal assignment are not met then the assignment becomes an Equitable assignment. The fact that it is not enforceable under current rules and is only valid in equity also refers to a transfer of future benefit.

Assignment Of Contract

A contract is a legally binding promise. It could be a promise to do something or a pledge to refrain from doing something. A contract involves the consent of two or more people, with one of them usually making an offer and the other accepting it.

Assignment of contract is covered by Section 37 of the Indian Contract Act of 1872. Any type of contract can be assigned under Indian contract law as long as permission is included in the assignment.

The rights and responsibilities of the people involved are unaffected by an assignment. These rights and responsibilities do not change. And, unless there was an agreement to the contrary, the assignor is still accountable if any problems develop after the transfer. As a result, the contract assignment entails an incorporeal transfer of rights and duties. And, according to Indian law, these transfers must be documented.

When it comes to handling contract assignments, an attorney’s role comes into play. An attorney is a certified court practitioner who acts as a subordinate or agent for the party he or she is representing and is the most qualified person for the same.

Contract rights and responsibilities are usually enforceable when they are assigned. However, they are not enforced in certain conditions, which are as follows:

• The contract prohibits assignment – An anti-assignment clause in a contract can prevent (and “void”) any assignments.
• The assignment materially alters what’s expected under the contract – Courts are reluctant to enforce an assignment if it impacts contract performance, reduces the expected value or return, or increases the risks for the other party to the contract (the person who is not assigning contractual rights). For example, assigning the contract to a factory farm dairy by Tom’s local, organic dairy would be regarded as a major change.
• The assignment violates the law or public policy – Some laws impose restrictions or outright bans on assignments. Many states, for example, restrict an employee from assigning future pay, and the federal government forbids the assignment of certain claims against the government. Other assignments may contradict public policy even though they are not forbidden by law. Personal injury claims, for example, cannot be assigned because this may encourage litigation.

Our judiciary has also stated that there are two types of contracts that can never be assigned:

1. When the deal is just personal.
2. When the law or the contract expressly prohibits the assignment of rights.

There are 2 alternatives for the Assignment of the contract:

1. Licensing

Licensing is the initial option for a contract assignment. A licence is an agreement between two parties in which one party (licensor) grants another party (licensee) a licence. In the event of a government-issued licence, the licence is obtained by filling out an application. It is by a specific agreement, usually in writing, in the event of a private party. “A licence is a promise not to sue,” because it either allows the licenced party to engage in an activity that would be illegal and subject to prosecution without the licence, or it allows the licenced party to do something that would violate the licencing party’s rights, for which the licenced party could be sued civilly, criminally, or both if the licence were not granted. Authorities may, for example, give a licence to authorise an activity that would otherwise be prohibited. It could entail paying a price, demonstrating capability, or both. The requirement could also be used to keep authorities informed about a certain sort of activity and allow them to impose rules and limitations.

• Delegation

The act of delegating authority to another person to carry out certain tasks is known as delegation. It is one of the basic principles of management leadership since it involves the practice of delegating and entrusting tasks to others. Managers must decide which tasks they should complete themselves and which tasks they should delegate to others to complete. The delegation, from a managerial standpoint, entails delegating project responsibility to team members, allowing them to effectively complete the work output with minimal involvement. Micromanagement is the polar opposite of effective delegation, in which a manager provides excessive input, direction, and evaluation of assigned tasks. Delegation gives a subordinate the authority to make decisions. It is the transfer of decision-making authority and accountability for outcomes from one organisational level to another. However, the person who delegated the job, to begin with, retains some level of responsibility for the activity’s outcome.

Assignment Of Property

Property is a legal term that refers to a group of belongings or riches, sometimes with strong overtones of individual ownership. In law, the word refers to the web of legal ties that exist between and among people concerning things.

An assignment is most common in landlord-tenant circumstances under property law. The Deed of Assignment in the agreed form executed or to be executed by the Borrower in respect of all of the Borrower’s estate rights, title, and interests in the Building Agreement and the Property, including any amendments and variations thereto, as well as any further deed of assignment or any deed executed in substitution for or in addition to the Assignment of Property.

For example, a person may be renting from a landlord but wishes for the property to be taken over by a third party. In this case, the person may have the option of assigning or subleasing the property to a third party. If the person assigns, the third party receives the entire balance of the term with no reversion to anyone, whereas if the person sublets, the third party receives only a portion of the remaining term. Significantly, the third party would have privity of estate with the landlord under an assignment, whereas the third party would not have privity of estate with the landlord under a sublease.

Conclusion

Assignments are typical occurrences. The most important thing is that the assignments follow the law’s requirements. Assignments must comply with the provisions of the Indian Contract Act of 1872 and the Transfer of Property Act of 1882, and must rigorously adhere to the restrictions set out therein.

References

1. http://docs.manupatra.in/newsline/articles/Upload/E915DA6B-361C-493B-91D1-96D8EB703128.pdf
2. https://blog.ipleaders.in/assignment-of-contract/
3. https://www.contractscounsel.com/b/assignment-of-contract

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