Assignment of Contract are entered when, one party transfers his rights and obligations, under the previous drawn contract to the third party. This Assignment Agreement is legal document and enforces the transfer of rights. But, it is to be noted that, the previous Agreement should not hold non assignability clause, which can make the Contract Assignment is unlawful.
The Assignment of Contract can be best understood by below given example:
Suppose you have signed a Contract with a car owner to sell his car at $10,000 and signed the intent to sell Contract with him, making you as the purchaser of the car. In the Sale Contract, the Car owner contracted to sell the car at $10,000. You searched for another buyer for $12,000 and assigned your right and responsibility, and sale contract to that buyer.
Now you asked the buyer to cut a check for $2000 and moved back. The car buyer pays the Car owner $ 10000, the price as agreed by you with the Car owner to sell his car. The payments are made by the car buyer directly to car owner, instead of you paying car owner. In the process you make a profit of $2000. The Title or ownership of the car is transferred to car buyer by the Car owner.
Such types of Assignment of Contract are quite common in Real Estate deals, where the buyer enter into Contract with the investor to sell investor’s house, deciding on price of the house but, sells the house to second buyer and makes profit on the deal. The new buyer pays to the investor directly; the price as agreed by the first buyer and difference is pocketed by first buyer. The Title or ownership of the property is transferred to 2nd buyers name by the investor.
The basic requirement for the transfer can be summed up as follows:
If above conditions are met, you can easily go for Assignment of Contract and make a profit on the deal.
If, you are also willing to go for the Assignment Contract, you can download following Contract template and print it.
ASSIGNMENT OF CONTRACT
FOR VALUE RECEIVED, the undersigned Assignor hereby assigns, transfers and sets over to (Assignee) all rights, title and interest held by the Assignor in and to the following described contract:
The Assignor warrants and represents that said contract is in full force and effect and is fully assignable.
The Assignee hereby assumes and agrees to perform all the remaining and executory obligations of the Assignor under the contract and agrees to indemnify and hold the Assignor harmless from any claim or demand resulting from non-performance by the Assignee.
The Assignee shall be entitled to all money remaining to be paid under the contract, which rights are also assigned hereunder.
The Assignor warrants that the contract is without modification, and remains on the terms contained.
The Assignor further warrants that it has full right and authority to transfer said contract and that the contract rights herein transferred are free of lien, encumbrance or adverse claim.
This assignment shall be binding upon and inure to the benefit of the parties, their successors and assigns.
Signed this __________[day] ____ [month], _20xx .