Contracts outlive circumstances: a business sells, a contractor exits a project, an investor flips a purchase agreement, a lease needs a new tenant. An assignment of contract is the instrument that moves the deal to a new party without renegotiating it from scratch.
This template handles the three questions every assignment turns on: what exactly transfers (rights, obligations, or both), whether the other contracting party must consent, and whether the assignor is released, with representations that protect the incoming assignee.
First question: is the contract assignable at all?
Most contract rights are freely assignable under US law unless the contract says otherwise, and most commercial contracts do say otherwise: anti-assignment clauses requiring written consent are standard. Read the original contract before drafting the assignment. Duties are stricter than rights: you can delegate performance, but you cannot delegate away responsibility without the counterparty's agreement, and personal-services obligations (a portrait painter, a keynote speaker) generally cannot be delegated at all. Certain rights also resist assignment by law, and government contracts have their own statutory regime.
An assignment made in breach can sink the contract
Assigning despite a consent requirement can itself be a default, giving the counterparty grounds to terminate. When the clause requires consent, make the assignment conditional on it, as this template does, and get the consent in writing before the effective date.
Assignment vs. novation: whether the assignor escapes
The default rule surprises assignors: assigning a contract does not release you. If the assignee fails to perform, the counterparty can still pursue the original party. Escaping that tail requires a novation, a three-way agreement in which the counterparty accepts the new party as a full substitute and releases the old one. The template offers both configurations: the standard assignment with the assignee indemnifying the assignor, and the novation with an express release countersigned by the counterparty. Sellers of businesses and departing partners should push for the novation; counterparties often prefer keeping two parties on the hook.
- Rights-only assignment: common for payment streams: the work stays with the assignor, the money flows to the assignee. Notice to the paying party is what obligates it to redirect payment.
- Full assignment with assumption: the assignee steps into the whole deal. The assignee's indemnity protects the assignor for post-assignment defaults, but only a novation removes direct liability.
Executing the assignment cleanly
Attach a complete copy of the original contract to the assignment, give written notice to the counterparty even when consent is not required (payments and notices must be redirected), and transfer the file: correspondence, invoices, and amendments. Real estate deals have specialized cousins: a lease moves by lease assignment, and a business sale that includes contracts usually rides inside an asset purchase agreement with assignments as schedules. For wholesaling real estate purchase contracts, check the purchase agreement's assignment clause and state disclosure rules before relying on a generic assignment.
Consideration and writing
Assignments given for value are contracts and follow ordinary contract rules; gratuitous assignments can be revocable until acted on. Put a stated consideration in the document, and remember that assignments of interests in land generally must be in writing under the statute of frauds.
Frequently asked questions
Do I need the other party's permission to assign a contract?
Check the contract first: if it contains an anti-assignment clause, yes, and assigning without consent can be a breach. If the contract is silent, rights are generally assignable without permission, though duties still require the assignee's assumption and notice to the counterparty is always wise.
Am I still liable after assigning the contract?
By default, yes: an assignment transfers the deal but not your responsibility for it. You are released only through a novation, where the counterparty expressly accepts the assignee as your substitute. The template's release option builds that consent into the signature block.
What is the difference between assigning and subcontracting?
An assignment transfers your position in the contract; a subcontract hires someone to help you perform while you remain the contracting party in full. If the counterparty should continue dealing with you, subcontract; if the new party should replace you, assign.
Can I assign only the right to be paid?
Yes: payment rights are the most commonly assigned contract right and generally assignable even under many anti-assignment clauses, which courts often read to restrict delegation of duties rather than the flow of money. Choose the rights-only option and notify the payer so payments are redirected.
Does an assignment need to be notarized?
No, signatures of the parties are sufficient for a valid assignment in every state. Notarization is only needed when the underlying subject requires recording, such as assignments touching real estate interests that will be filed with a county recorder.
What should the assignee check before accepting an assignment?
Read the complete original contract including amendments, confirm the assignor is not in default, verify the anti-assignment clause is satisfied, and get the representations this template includes: contract in force, no prior assignments, no known defaults. The assignee inherits the contract as it actually stands, not as described.