Contract Assignment Definition

The transfer of legal rights under an agreement; for example, where an employer assigns a building contract (or, technically, the benefit of the building contract) to a buyer of the site. Before the assignment can take effect, the buyer must give notice to the contractor.

The effect of the assignment (continuing this example) is that the buyer can now sue the contractor under the building contract. The employer can no longer enforce the building contract; but he remains liable to the contractor because the employer can’t assign his liability without the contractor’s consent (he can only assign his rights or benefit).

Generally, if an agreement contains no prohibition or restriction on assignment, each party may freely assign its benefit in the agreement to whomever it pleases, and assignees may assign further.