Commercial Contract Assignment (NY)

This practice note addresses the assignability of commercial contracts in New York. It covers situations where an agreement (1) permits assignment, (2) prohibits assignment, (3) restricts assignment to certain situations, or (4) is silent with respect to assignability. The enforceability of anti-assignment clauses in New York is also covered by this note.

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  • Practical Law

Assignability of Commercial Contracts (NY)

Practical law practice note w-010-1902  (approx. 41 pages).

  • General Contract and Boilerplate
  • United States

Commercial Contract Association (NY)

This training note addresses the assignability of advertorial contracts in New York. It covers situations where an agreement (1) allow assignment, (2) proscribes assignment, (3) restricts assignment to certain situations, conversely (4) the silent with respect go assignability. The enforceability of anti-assignment clauses in New Majorek is plus covered by this note. A recently issued New York State law that did effect immediately restricts employers’ use by employment agreements which requested that employees assign to their employer rights till inventions that were generated by to workers on his/her own time both without the use of the employer’s resources.

assignability of commercial contracts (ny)

Commercial Contract Assignment (NY)

This practice notice addresses the assignability of commercial contracts in New York. It coverages situations where an agreement (1) permits assignment, (2) prohibits assignment, (3) restricted assignment to certain situations, or (4) is silent with respect to assignability. The applicability of anti-assignment clauses in New York is also covers by this note. 2022 New York Laws :: UCC - Uniform Commercial Code :: Products 2 - Sales :: Component 2 - Entry, Formation and Readjustment is Contract :: 2-210 - Delegation of Performance; Assign of Rights.

assignability of commercial contracts (ny)

Assignability Of Contracts: Everything You Need to Know

The assignability of contracts is when one side of a contract agreement transfers the contract to another entity, so that the new entity fulfills the terms of the contract. 3 min read updated on February 01, 2023

The assignability of contracts is when one side of a contract agreement transfers the contract to another entity, so that the new entity fulfills the terms of the contract. Being able to assign contracts depends on a variety of factors, mainly the language contained in the contract. 

How Contract Assignments Work

Some contracts prohibit assignment altogether, while others may allow it with the other party's consent. An example of a basic contract assignment may look like this: 

  • Bob contracts with a dairy to deliver a gallon of cream to his house every day. 
  • The dairy assigns Bob's contract to another dairy. 
  • As long as Bob is notified of the change in provider and gets his gallon of cream every day, his contract is with the new dairy.

Because the law has a preference for the free alienation of property, parties are free to assign contract rights and delegate contractual obligations. 

Assigning a contract to another doesn't always take away the assigning party's liability. Some contracts include a clause that at least one of the original parties guarantees performance — or fulfills the contract terms — no matter what the assignment.

The performance, however, can't be changed in contract assignment. There's a limit to substitution, so the new party has no power to change the performance per the rights stated in the contract. For example, if the obliging party has pledged to perform only if some event happens (with no certainty that it will happen), no assignment should increase the risk to the obliging party if the event doesn't happen through no fault of the obligor.

The nature of a contract's obligations determines its assignability.

When Assignments Won't Be Enforced

In certain cases, contracts can't be assigned.

  • A clause in the contract prohibits assignment. This is usually called an anti-assignment clause.
  • Assignments can't take place if they materially alter what's expected under the contract. If the assignment affects the expected performance as outlined in the contract, lowers the value of returns (including anticipated returns), or increases risks for the other contract party (the one who's not assigning contractual rights), it's unlikely that any court will enforce the arrangement.
  • If an assignment violates public policy or the law, it won't be enforced. For instance, the federal government prohibits certain claim assignments against the government, and many states prohibit an employee from assigning future wages.

Other assignments may not be illegal, but they could still violate public policy. As an example, personal injury claims can't be assigned because doing so might encourage litigation.

When looking into whether one party can transfer a contract or some rights and obligations in the contract, the transferring party has to check into applicable laws and statutes. That party must also check the contract's express language to determine whether or not it can transfer the assignment without obtaining consent from the non-transferring party.

If the contract requires that consent is given and the transferring party doesn't get that consent, it risks a contract breach as well as an invalid, ineffective transfer.

How to Assign a Contract

Follow these steps to assign contracts, when it's allowed for you to do so.

  • Carefully study the contract for prohibitions or limitations, such as anti-assignment clauses. In some cases, there isn't a separate anti-assignment clause, but it may be stated in another way, such as language that says, "This contract may not be assigned."
  • Execute the assignment. As long as you're free to assign the contract, prepare and enter into the assignment, which is basically an agreement transferring your rights and obligations.
  • Notify the obligor, or the non-transferring party. After you assign contract rights to the assignee, notify the other party that was the original contractor, also known as the obligor. This notice relieves you of any liability as stated in the contract, as long as the contract doesn't say differently — for instance, the contract states that you, as the assignor, guarantee performance under the contract. 

Before trying to assign a contract to a third party, it's very important to understand if you're allowed to do so. You'll have to research legal statutes as well as the language in the contract to ensure you follow rules and regulations. Otherwise, you risk a breach of contract .

If you need help with contract assignments, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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Content Approved by UpCounsel

  • Consent to Assignment
  • Assignment Contract Law
  • Assignment of Contract Rights
  • Assignment of Rights and Obligations Under a Contract
  • Assignment Of Contracts
  • Legal Assignment
  • Assignment Law
  • Assignment of Rights Example
  • Third Party Contracts
  • What Is the Definition of Assigns

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Assignability

Assignability clause samples

10.3 Assignability .This Agreement may not be assigned by either Party, without the written consent of the other Party, such consent not to be unreasonably withheld.

02/13/2020 (Baudax Bio, Inc.)

SUCCESSION AND ASSIGNABILITY . This Note shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. The Holder may not assign any of his or its rights, interests, or obligations hereunder on his or its own discretion without further approval from the Company.

06/06/2016 (Wrapmail, Inc.)

Section8.13 Non- Assignability . This Agreement and the rights and obligations of the parties under this Agreement may not be assigned or delegated by either party without the prior written consent of the other party, and any purported assignment without such consent shall be void.

02/02/2018 (2017 MANDATORY EXCHANGEABLE TRUST)

4. Non- Assignability . The Restricted Stock Unit shall not be transferable by the Grantee, except as the Plan or this Agreement may otherwise provide.

03/19/2021 (CuriosityStream Inc.)

Assignability . This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns.

03/15/2021 (MMEX Resources Corp)

17. Assignability . During Employee’s employment, this Agreement may not be assigned by either party without the written consent of the other. However, Employer may assign its rights and obligations under this Agreement without Employee’s consent to a successor by sale, merger or liquidation, if such successor carries on the Business substantially in the form in which it is being conducted at the time of the sale, merger or liquidation. This Agreement is binding upon Employee, Employee’s heirs, personal representatives and permitted assigns and on Employer, its successors and assigns.

03/11/2019 (Trillium Therapeutics Inc.)

10.7. Assignability . This Agreement shall be binding upon, and shall be enforceable by and inure solely to the benefit of, the Parties and their respective successors and permitted assigns; provided, however, that neither this Agreement nor any of a Party’s rights or obligations hereunder may be assigned or delegated by such Party without the prior written consent of the other Party, and any attempted assignment or delegation of this Agreement or any of such rights or obligations by such Party without the other Party’s prior written consent shall be void and of no effect.

01/25/2019 (Edge Therapeutics, Inc.)

6.3 Assignability . Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns. Subject to the prior written consent of the Company, the Holder may assign or transfer this Note to any transferee or have the shares that it converts under this Note sent to any third party. If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note registered as the Holder may request and the Company may accept, representing the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred, a new Note to the Holder representing the outstanding Principal not being transferred. The Holder and any assignee, by acceptance of this Nate, acknowledge and agree that, following conversion or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal stated on the face of this Note.

05/26/2016 (NewLead Holdings Ltd.)

5. Assignability . This Amendment shall be binding upon, and shall be enforceable by and inure solely to the benefit of, the Parties and their respective successors and assigns.

12/14/2018 (APRICUS BIOSCIENCES, INC.)

C. Assignability . Neither party to this Agreement may assign all or any part of the party’s rights and obligations under the terms of this Agreement without the prior written consent of the other party. No assignment that is approved by the other party is to relieve the assignor of the assignor’s obligations under the terms of this Agreement if the assignee fails to perform those obligations.

12/12/2017 (Luther Burbank Corp)

6.4 Non- Assignability . This Agreement and the rights and obligations hereunder, shall be fully assignable by the Manager to an affiliate thereof. This Agreement and the rights and obligations hereunder shall not be assignable by any other party hereto without the written consent of all of the other parties hereto. Provided, however, that the foregoing shall not extend to assignments required by any insurance carrier in any matter relating to subrogation and shall not extend to an assignment by any Insured Entity in connection with a sale or financing of a Project or a portion thereof.

05/04/2018 (Spirit MTA REIT)

6. Assignability . This Amendment shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of the Common Shares or the Warrants.

07/03/2019 (HISTOGENICS CORP)

11. ASSIGNABILITY . This Agreement is not transferable or assignable by the undersigned except as may be provided herein.

09/02/2016 (GEX MANAGEMENT, INC.)

3.4. Assignability . This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns, and may not be assigned by the Holder without the prior written consent of the Borrower, which consent may not be unreasonably withheld.

09/02/2016 (Full Spectrum Inc.)

7. Assignability . Assignee shall not assign the Contract or this Assignment or any of its rights, interests, or obligations thereunder or hereunder without the prior written approval of Assignor. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee.

03/15/2021 (Aspirational Consumer Lifestyle Corp.)

2. Non- Assignability . This Agreement shall not be assignable without the prior written consent of the non-assigning party.

08/10/2016 (Affinity Gaming)

a. Captions and Headings. The Article and Section headings throughout this Agreement are for convenience of reference only and shall in no way be deemed to define, limit or add to any provision of this Agreement. b. Notification of Changes. Subscriber agrees and covenants to notify the Company immediately upon the occurrence of any event prior to the consummation of this Offering that would cause any representation, warranty, covenant or other statement contained in this Agreement to be false or incorrect or of any change in any statement made herein occurring prior to the consummation of this Offering. c. Assignability . This Agreement is not assignable by Subscriber, and may not be modified, waived or terminated except by an instrument in writing signed by the party against whom enforcement of such modification, waiver or termination is sought. d. Binding Effect. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and assigns, and the agreements, representations, warranties and acknowledgments contained herein shall be deemed to be made by and be binding upon such heirs, executors, administrators, successors, legal representatives and assigns. e. Obligations Irrevocable. The obligations of Subscriber shall be irrevocable, except with the consent of the Company, until the consummation or termination of the Offering. f. Entire Agreement; Amendment. This Agreement states the entire agreement and understanding of the parties relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written. No amendment of the Agreement shall be made without the express written consent of the parties. g. Severability. The invalidity or unenforceability of any particular provision of this Agreement shall not affect any other provision hereof, which shall be construed in all respects as if such invalid or unenforceable provision were omitted.

01/12/2021 (Masterworks Collection 001, LLC)

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Assignability of Commercial Contracts (NY) | Practical Law

assignability of commercial contracts (ny)

Assignability of Commercial Contracts (NY)

Practical law practice note w-010-1902  (approx. 41 pages).

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IMAGES

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COMMENTS

  1. Assignability of Commercial Contracts (NY)

    A Practice Note examining New York law relating to the transferability of commercial contracts, including a party's legal ability to assign its rights and delegate its performance obligations under a contract that is silent on transferability, the construction and enforceability of contractual anti-assignment and anti-delegation clauses, and dra...

  2. Commercial Contract Assignment (NY)

    This practice note addresses the assignability of commercial contracts in New York. It covers situations where an agreement (1) permits assignment, (2) prohibits assignment, (3) restricts assignment to certain situations, or (4) is silent with respect to assignability. The enforceability of anti-assignment clauses in New York is also covered by this note.

  3. Contract Assignment: New York

    Contract Assignment: New York by Practical Law Commercial Transactions Maintained • New York, United States A Q&A guide to contract assignment in New York. This Q&A addresses key areas of contractual limitations on assignment of rights and delegation of performance. Answers to questions can be compared across a number of jurisdictions.

  4. Assessing Assignability: Transferring Contractual Rights or ...

    Making an ineffective and invalid transfer. For more information on assigning rights and delegating obligations, see Practice Note, Assignability of Commercial Contracts. Distinguishing Between Assignment and Delegation Contracting parties and practitioners often refer to assignability of contracts.

  5. Assignability of Commercial Contracts (NY)

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  7. Assignability of Commercial Contracts (NY)

    Assignability of Commercial Contracts (NY) A Practice Note examining New York law relating to the transferability of commercial contracts, including a party's legal ability to assign its rights and delegate its performance obligations under a contract that is silent on transferability, the construction and enforceability of contractual anti ...

  8. Assignability of Commercial Contracts (NY)

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  9. Commercial Contract Assignment (NY)

    This practice remarks addresses the assignability of commercial contracts in Brand York. It covers situations where an contracts (1) permits assignment, (2) prohibits assignment, (3) restricts assigned to certain situations, or (4) is silent with respect on assignability. The enforceability of anti-assignment legal in New York belongs see covered by this note.

  10. Commercial Contract Assignment (NY)

    Such practice note addresses the assignability of commercial contract in New York. It covers situations what an agreement (1) permits assignment, (2) prohibits assignment, (3) restricts assignment the some situations, or (4) is silent with respect to assignability. The enforceability of anti-assignment clauses to New York is also covered by this note.

  11. Contract Corner: Assignment and Delegation

    Contract Corner: Assignment and Delegation. An assignment and delegation provision is the clause that specifies a party's ability to assign its rights or delegate its duties under an agreement. It is a provision that is often placed in the "miscellaneous" or "general" sections of commercial contracts, but it should not be thought of ...

  12. Assignability Of Contracts: Everything You Need to Know

    The assignability of contracts is when one side of a contract agreement transfers the contract to another entity, so that the new entity fulfills the terms of the contract. 3 min read updated on February 01, 2023

  13. NEW YORK Contract Law

    New York State Bar Association Continuing Legal Education publications are intended to provide current and accurate information to help attorneys maintain their professional competence.

  14. General Contract Clauses: Assignment and Delegation (NY)

    A Standard Clause, also known as an anti-assignment clause and anti-delegation clause, that provides for a contractual limitation on the assignability of contractual rights and the delegation of contractual duties under New York law. This Standard Clause has integrated notes with important explanations and drafting tips.

  15. Assignability of Commercial Contracts (NY)

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  16. Assignability of Commercial Contracts (NY)

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  17. Contract Corner: Assignment and Delegation

    An assignment or delegation provision is the clamp that specifies a party's ability to assign its rights or delegate its your down an agreement. Computers lives a provision that is often placed in who "miscellaneous" or "general" sections concerning commercial contracts, but computer should don be thought the as regular "boilerplate" language that never changes.

  18. PDF Assignability of Commercial Contracts (TX)

    Region: US Assignability of Commercial Contracts (TX) by Charles B. Koerth, Catherine Chlebowski, and Grace Glover, Gray Reed & McGraw LLP, with Practical Law Commercial Transactions Law stated as at 20 Mar 2019 • Texas

  19. Examples of assignability clauses in contracts

    Source. Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. 03/15/2021 (MMEX Resources Corp) Source. 17. Assignability. During Employee's employment, this Agreement may not be assigned by either party without the written ...

  20. PDF Assignability of Commercial Contracts (GA)

    Assignability of Commercial Contracts (GA) The delegating party is liable to the delegatee for an invalid delegation. The delegating party would remain liable to the non-delegating party if the delegatee fails to perform. The law may limit or condition the ability to delegate duties under the contract (see Ability to Delegate Performance).

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  22. PDF Assignability of Commercial Contracts (GA)

    Assignability of Commercial Contracts (GA) (See Fagbemi v. JDN Realty Corp., 275 Ga. App. 540, 542 (2005) (discussing the assignment of a commercial lease).) An assignment is a contract and therefore, to be enforceable, it must indicate a clear, present intent to transfer the assigned rights without need for any further action by the assignee.

  23. 10 Provisions to Include in a New York Business Contract

    10 Provender to Include in a Add York Business Shrink. Select Artyniuk 2023-11-28T13:20:21-05:00 September 1, 2022 | Commercial Checklists, Business Contract| 2023-11-28T13:20:21-05:00 September 1, 2022 | Commercial Checklists, Business Contract|