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Contracts • Third Parties
K#179
Legal Definition
An assignment is a transfer of rights under an existing contract to a third party.
Plain English Explanation
A contract creates legally enforceable rights between parties. The most common right is the right to demand payment, or the right to receive a benefit of performance. When transfer these rights to a different party, it is called an assignment.
Hypothetical
Hypo 1: Bob wanted his house painted. Sam paints houses. Bob offered Sam $200 to paint his house. Sam agreed. Sam owed $200 to Amy, so he assigned his right to receive $200 from Bob to Amy. Bob and Sam still have a contract between them, but Amy now has the right to collect $200 from Bob.
Visual Aids
Related Concepts
In a third-party beneficiary situation, who is the third-party beneificiary, who is the promisor, and who is the promisee?
What defenses may a promisor assert against a third-party beneficiary?
What is a promisee?
What is a promisor?
What is the difference between an incidental and intended beneficiary?
What two types of intended beneficiaries are there?
When do a third party's rights to enforce the contract vest?
Who can sue whom in a suit involving beneficiaries, promisees, and promisors?
Who can sue whom in a suit involving the delegation of duties?