In business law, assignment refers to the legal transfer of rights, property, or other benefits between two parties. In the assignment, one party known as the “assignor” transfers the rights to another party referred to as the “assignee.” In most cases, burdens and duties cannot be transferred in an assignment unless the assignee explicitly agrees. Assignments are typically carried out with payment for contractual consideration, or they may be given as a gift.
In order to better understand how assignment works, let’s take a look at one of the most common examples of assignment. In property law, there may be a situation in which a tenant renting a house from a landlord wants another party to take over their lease of the property. The tenant, who would be the assignor in this case, may choose to assign the lease to another party. This party, which would be referred to as the assignee, would receive property rights over the house. Through the transfer of these rights, the new tenants have officially created a legal relationship with the landlord of the house.
Another well-known example of assignment in law is wage assignment. Wage assignment allows creditors to deduct money directly from an employee’s paycheck to pay off a debt. These assignments, which are voluntary agreements between the employee and the creditor, are often used to collect child support payments or other debts such as unpaid taxes or loans.
An assignment must meet certain requirements in order to have legal significance and be enforceable in a court of law. The following are some of the most essential requirements for assignments:
It should be noted that assignments will be deemed invalid and therefore will not be enforced if the relevant contract specifically prohibits assignment or if the assignment goes against public policy or law.
We see assignments everywhere, whether it be in the realms of property, family, bankruptcy, or corporate law. Although they are considered voluntary agreements that both parties must agree to, some are not always aware that they have entered into assignments. In fact, in most cases, employees enter into wage assignment contracts by mistake. Wage assignment provisions may be hidden among the fine print in certain contracts, which is why it is so important to have an experienced attorney review contracts before you sign them.
A top-tier business attorney can help you with all things assignments. Feel free to reach out to one of our experienced lawyers today.