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Assignment Agreement Template

Use our assignment agreement to transfer contractual obligations.

Updated February 1, 2024 Reviewed by Brooke Davis

An assignment agreement is a legal document that transfers rights, responsibilities, and benefits from one party (the “assignor”) to another (the “assignee”). You can use it to reassign debt, real estate, intellectual property, leases, insurance policies, and government contracts.

What Is an Assignment Agreement?

What to include in an assignment agreement, how to assign a contract, how to write an assignment agreement, assignment agreement sample.

Partnership Interest

An assignment agreement effectively transfers the rights and obligations of a person or entity under an initial contract to another. The original party is the assignor, and the assignee takes on the contract’s duties and benefits.

It’s often a requirement to let the other party in the original deal know the contract is being transferred. It’s essential to create this form thoughtfully, as a poorly written assignment agreement may leave the assignor obligated to certain aspects of the deal.

The most common use of an assignment agreement occurs when the assignor no longer can or wants to continue with a contract. Instead of leaving the initial party or breaking the agreement, the assignor can transfer the contract to another individual or entity.

For example, imagine a small residential trash collection service plans to close its operations. Before it closes, the business brokers a deal to send its accounts to a curbside pickup company providing similar services. After notifying account holders, the latter company continues the service while receiving payment.

Create a thorough assignment agreement by including the following information:

• Effective Date:  The document must indicate when the transfer of rights and obligations occurs.
• Parties:  Include the full name and address of the assignor, assignee, and obligor (if required).
• Assignment:  Provide details that identify the original contract being assigned.
• Third-Party Approval: If the initial contract requires the approval of the obligor, note the date the approval was received.
• Signatures:  Both parties must sign and date the printed assignment contract template once completed. If a notary is required, wait until you are in the presence of the official and present identification before signing. Failure to do so may result in having to redo the assignment contract.

Review the Contract Terms

Carefully review the terms of the existing contract. Some contracts may have specific provisions regarding assignment. Check for any restrictions or requirements related to assigning the contract.

Check for Anti-Assignment Clauses

Some contracts include anti-assignment clauses that prohibit or restrict the ability to assign the contract without the consent of the other party. If there’s such a clause, you may need the consent of the original parties to proceed.

Determine Assignability

Ensure that the contract is assignable. Some contracts, especially those involving personal services or unique skills, may not be assignable without the other party’s agreement.

Get Consent from the Other Party (if Required)

If the contract includes an anti-assignment clause or requires consent for assignment, seek written consent from the other party. This can often be done through a formal amendment to the contract.

Prepare an Assignment Agreement

Draft an assignment agreement that clearly outlines the transfer of rights and obligations from the assignor (the party assigning the contract) to the assignee (the party receiving the assignment). Include details such as the names of the parties, the effective date of the assignment, and the specific rights and obligations being transferred.

Include Original Contract Information

Attach a copy of the original contract or reference its key terms in the assignment agreement. This helps in clearly identifying the contract being assigned.

Execution of the Assignment Agreement

Both the assignor and assignee should sign the assignment agreement. Signatures should be notarized if required by the contract or local laws.

Notice to the Other Party

Provide notice of the assignment to the non-assigning party. This can be done formally through a letter or as specified in the contract.

File the Assignment

File the assignment agreement with the appropriate parties or entities as required. This may include filing with the original contracting party or relevant government authorities.

Communicate with Third Parties

Inform any relevant third parties, such as suppliers, customers, or service providers, about the assignment to ensure a smooth transition.

Keep Copies for Records

Keep copies of the assignment agreement, original contract, and any related communications for your records.

Here’s a list of steps on how to write an assignment agreement:

Step 1 – List the Assignor’s and Assignee’s Details

List all of the pertinent information regarding the parties involved in the transfer. This information includes their full names, addresses, phone numbers, and other relevant contact information.

This step clarifies who’s transferring the initial contract and who will take on its responsibilities.

Step 2 – Provide Original Contract Information

Describing and identifying the contract that is effectively being reassigned is essential. This step avoids any confusion after the transfer has been completed.

Step 3 – State the Consideration

Provide accurate information regarding the amount the assignee pays to assume the contract. This figure should include taxes and any relevant peripheral expenses. If the assignee will pay the consideration over a period, indicate the method and installments.

Step 4 – Provide Any Terms and Conditions

The terms and conditions of any agreement are crucial to a smooth transaction. You must cover issues such as dispute resolution, governing law, obligor approval, and any relevant clauses.

Step 5 – Obtain Signatures

Both parties must sign the agreement to ensure it is legally binding and that they have read and understood the contract. If a notary is required, wait to sign off in their presence.

Related Documents

• Purchase Agreement : Outlines the terms and conditions of an item sale.
• Business Contract : An agreement in which each party agrees to an exchange, typically involving money, goods, or services.
• Lease/Rental Agreement : A lease agreement is a written document that officially recognizes a legally binding relationship between two parties -- a landlord and a tenant.
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Legal assignment definition

What does legal assignment mean.

A consensual assignment occurs by way of a gift or consideration. Assignments by law can occur during life or on death and will transfer the benefit of rights to the assignee but will not make the assignee personally liable. An attempt to transfer benefits under a contract of personal performance will not be effective.

The basic requirements for a legal assignment are that only the benefit of the agreement can be assigned; the assignment must be absolute; the rights to be assigned must be wholly ascertainable and must not relate to part only of a debt, the assignment must be in writing and signed under hand by the assignor and notice of the assignment must be received by the other party or parties for the assignment to take effect.

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Imagine paying millions to acquire a company only to later discover the restrictive covenants in the employment agreements of high-level executives were unenforceable. That’s precisely what happened in  Intertek Asset Integrity Management . In  Intertek , Texas’s Twelfth Court of Appeals held a company Vice President’s non-compete was unenforceable by the purchaser-entity because the underlying employment agreement lacked an assignment clause. Such language, if included, would have permitted the seller to transfer the contract’s rights and obligations without the employee’s consent. Assignability clauses are frequently buried in the “miscellaneous” section of agreements and—too often—omitted. Businesses who overlook these terms in Texas employment contracts do so at their peril.

Restrictive covenants can be a key component to success in highly-competitive industries of all stripes. Well-drafted noncompetes, customer and employee non-solicits, and nondisclosure provisions in employment contracts can safeguard a company’s confidential and proprietary information, while limiting unfair competition from employee-raiding competitors looking to shortcut the path to profits. In addition, having enforceable restrictive covenants in place with key personnel can add value to a business in the context of a sale. Unsurprisingly, then, much time, energy, and focus is placed on drafting restrictive covenants in employment contracts. But an important, and related, contractual provision is often given short shrift: assignability.

Texas courts have demonstrated just how crucial assignability clauses are in employment contracts—and how the absence of one can, and likely will, render the enforcement of restrictive covenants by a purchaser-entity nearly impossible. Accordingly, savvy employers must recognize the importance of ensuring their restrictive covenant agreements contain assignability clauses; or risk having them declared worthless during or after an acquisition event.

As a general matter of Texas law, contracts are freely assignable to another party unless the contract is for “personal services.” Personal service contracts are those which contemplate the performance of personal services involving the exercise of special knowledge, judgment, taste, skill, or ability, including work requiring “rare genius” or “extraordinary skill.” [1]  These contracts are only assignable if the assignor has the assignee’s consent—most often accomplished via an assignability clause. And absent an assignability clause, it could be impossible for a third party to enforce the underlying agreement against the assignee. Simply put, a restrictive covenant agreement with a high-level employee or executive  may be unassignable  without that individual’s consent.

This precise issue recently came before the Tyler Court of Appeals; which refused to enforce a non-compete provision in an employment contract because the agreement did not have an assignability clause and the employee did not otherwise consent to the assignment.

In  Intertek Asset Integrity Management , [2]  a Vice President successfully prevented a purchaser entity, Intertek, from enforcing the non-compete provision in his employment agreement. Notably, the employment agreement did not contain an assignability clause. In an effort to overcome this omission, Intertek argued that the employment agreement did not fall into the “personal services” contract exception and should be enforceable. In addition, Intertek argued that the purchase agreement defined the acquired “assets” to include all the “seller’s rights, title and interest in all Contracts … and Employee agreements of the seller.” The court rejected Intertek’s argument and refused to enforce the non-compete provision in the employment agreement. In so doing, the  Intertek  court made two major findings. First, the court found that the employment agreement was a personal services contract, because the Vice President’s position required “rare genius” or “extraordinary skill” and relied on the Vice President’s personal trust, confidence, skill, character, or credit. Second, because the personal services contract (i.e., the employment agreement) did not contain an assignability provision and the Vice President did not consent to assignment, the non-compete provision was unenforceable.

Since  Intertek,  courts have continued to support this concept that, without a valid assignability clause, restrictive covenants in an employment agreement are unenforceable by purchaser entities. [3]

Assignability clauses are frequently relegated to the “miscellaneous” section of employment agreements, and can seem inconsequential. But the failure to include a carefully-crafted assignability clause could be detrimental to businesses seeking to enforce restrictive covenants after an acquisition. It is important for employers to recognize the importance of including these provisions within their employment agreements so that they remain enforceable following an acquisition or asset transfer. And buyers in a corporate transaction should have a clear understanding of what language is—and is not—in the seller’s contracts with key executives.

[1]  See In re Wofford , 608 B.R. 494, 496-97 (Bankr. E.D. Tex. 2019).

[2]  Intertek Asset Integrity Mgmt. v. Dirksen , No. 12-20-00060-CV, 2021 WL 1047055, 2021 Tex. App. LEXIS 2112 (Tex. App.—Tyler Mar. 18, 2021, no pet. h.).

[3]   See Winsupply E. Hous. v. Blackmon , No. 4:21-CV-01387, 2021 WL 5504756, 2021 U.S. Dist. LEXIS 225067, at *17 (S.D. Tex. 2021) (declining to enforce a non-compete provision against a salesperson and sales assistant by an acquiring company, because their employment agreements did not contain  valid  assignment clauses and the employees did not otherwise agree to assignment).

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City narrowly passes revised CBA language that ‘needs work’

The Community Benefit Agreement program, created to ensure projects in St. Petersburg have a positive impact, has been untwined and reworked multiple times, and will continue to visit the drawing board until the language satisfies stakeholders. 

The CBA applies to projects with a minimum city participation value of at least $500,000. In exchange for the city’s contribution in a project, the developer must meet requirements that can mitigate certain impacts and create positive benefits for the surrounding neighborhood; however, the required equity measurements and alternative options are drawing concerns from councilmembers. 

During the Oct. 19 St. Petersburg City Council meeting, the members cast a 5-to-3 vote, narrowly passing the newly crafted language in the CBA.

The hesitancy was primarily due to the revised language that gives vying developers more flexibility in opting out of creating affordable housing units and elevating participation from minority-owned businesses for a project. 

“We knew it [the CBA] was a launch of something to go through continuous improvement, and I hope it always will,” Councilmember Gina Driscoll said. “It’s so thick, weighty and consequential, it does beg for examination on a regular basis.” 

The changes in the ordinance that remove certain exemptions, incorporate alternative benefits, amend inapplicable projects and other standards in the following categories: 

Affordable office component: The affordable office component use is defined as meeting 90% of the market rate rent in a specific area, whether it’s a proposed office project in downtown or the Deuces Live corridor. 

Affordable housing:  A residential project in a specific zoning district must allocate at least 30% of the units at the site to serve those earning 80% of the area median income (AMI). If the project is not located in a specified zoning district, units should serve residents earning 120% of the AMI. However, a developer can make a payment in lieu of building affordable housing units. City Director of Economic and Workforce Development Brian Caper said the development community explained it typically costs $100,000 or more to construct an affordable unit. The new language now states a developer must pay $150,000 per unconstructed affordable unit. 

Streamline process: At least 10% of small, women- or minority-owned businesses must participate in the construction of the development. The intent is to reach a 30% participation rate. 

Apprenticeship: Developers must utilize an apprenticeship program registered with the State of Florida Department of Education. 

An eligible project would go before the CBAC, and the city would conduct a public meeting to gather input from the surrounding neighborhoods. The city and developer would negotiate terms, which the CBAC would review. It would go before the city council for final approval. 

Although there were multiple meetings for the second reiteration of the ordinance, CBAC member Ruth Whitney, who said she was not speaking on behalf of the CBAC, claims that the council didn’t meet for months and was not fully aware of all the changes. 

She also questioned the benefits of affordable commercial use and the determined affordable housing percentages. 

Caper explained the CBAC last met in August. Since then, there have been one-on-one meetings with standing members about the revisions following the initial first reading.

“It [communication concerns and changes] gives me pause because we have big projects coming up,” councilmember John Muhammad said. 

He said the city received emails from additional members challenging the new language.

“We have been working on this for an extremely long time, and what’s before us is still not where we want to be,” said councilmember Deborah Figgs-Sanders. “We know how important their [CBAC] feedback is. This is year number seven that we’ve been talking about the CBA. When are we going to get there [finalize it]?” 

Figgs-Sanders said she was also disappointed that the “best effort practices” language was not included in the CBA guidance document. 

Caper said the item is drafted, but he is working with the city administration to align the language with the city’s procurement and apprenticeship programs and noted the “best effort practices” are part of the required impact report from a developer. 

Muhammad, and other councilmembers, supported the notion of hosting a joint CBAC and city council meeting to hear “real-time feedback and workshop it [the agreement] collectively instead of piecemealing it.” 

The city council approved the initial ordinance in 2021. 

In 2022, the CBA Committee reviewed the first-ever qualifying project – a Moffitt Cancer Center tied to the development of a residential complex, hotel and parking garage. Despite numerous meetings, the CBAC pushed the project forward; it was ultimately rejected by the city. 

“This ordinance from a developer’s point of view is just very cumbersome for a business to go through. We saw that in the Moffitt deal,” Councilmember Ed Montanari said. “There’s a lot I disagree with, but the way it stands now, it’s better than what we currently have.” 

Similar to fellow councilmembers, Montanari opposed making changes on the dais. 

The inapplicable projects under the CBA program include those tied to a lease agreement, which does not contain a purchase option; construction or renovation of city-owned facilities; and public projects owned by the local, state or a federal governmental entity. 

Councilmember Richie Floyd highlighted how the new, planned Tampa Bay Rays stadium would be exempt from the review process as it would be developed on county-owned land, and the public may view this as a “loophole” in the CBA process. 

However, anyone protesting against an exemption can seek legal action. 

October 22, 2023at5:50 pm

Stop calling it “affordable housing”. It’s subsidized housing. Calling it “affordable housing “ is a loaded political term designed to fleece your audience. It’s subsidized. It’s fully funded by someone else.

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