Editorial Assignment

Editorial Assignment-34
The assignor often delegates duties in addition to rights to the assignee, but the assignor may remain ultimately responsible.However, in the United States, there are various laws that limit the liability of the assignee, often to facilitate credit, as assignees are typically lenders.After the assignment of contractual rights, the assignee will receive all benefits that had accrued to the assignor.

The effect of a valid assignment is to extinguish privity (in other words, contractual relationship, including right to sue) between the assignor and the third-party obligor and create privity between the obligor and the assignee.

Unless the contractual agreement states otherwise, the assignee typically does not receive more rights than the assignor, and the assignor may remain liable to the original counterparty for the performance of the contract.

A contract may contain a non-assignment clause, which prohibits the assignment of specific rights and some various rights, or of the entire contract, to another.

However, such a clause does not necessarily destroy the power of either party to make an assignment.

Equipment Lease Agreements typically contain language prohibiting the lessee from assigning the lease to a third party.

For example, "You have no right to sell, transfer, assign, sublease, or encumber the equipment or this agreement" protects the Lessor’s collateral and credit underwriting guidelines in the event the lessee ever wants to transfer the lease to another party.An assignment cannot have any effect on the duties of the other party to the contract, nor can it reduce the possibility of the other party receiving full performance of the same quality.Certain kinds of performance, therefore, cannot be assigned, because they create a unique relationship between the parties to the contract.The rights may be vested or contingent, Mortgages and loans are relatively straightforward and amenable to assignment.An assignor may assign rights, such as a mortgage note issued by a third party borrower, and this would require the latter to make repayments to the assignee.For example, the assignment of a legal malpractice claim is void since an assignee would be a stranger to the attorney-client relationship, who was owed no duty by the attorney and would imperil the sanctity of the highly confidential and fiduciary relationship existing between attorney and client.Torts are not assignable as public policy, and various statutes may prohibit assignment in certain instances.The common law favors the freedom of assignment, so an assignment will generally be permitted unless there is an express prohibition against assignment in the contract.Where assignment is thus permitted, the assignor need not consult the other party to the contract.A related concept of assignment is novation wherein, by agreement with all parties, one contracting party is replaced by a new party.While novation requires the consent of all parties, assignment needs no consent from other non-assigning parties.


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