A client to a construction contract, collateral warranty, or consultant’s appointment may desire to assign the benefit under such a service agreement to a third party, such as a buyer or renter of a building. As part of the security package for their credit to finance the development, banks and other funders will commonly accept an assignment of the benefit of a suite of construction documents in relation of the development. A bank will wish to have the benefit of such documents in order to replace the employer’s position under them if the employer defaults on its financial obligations throughout the duration of the project.
10+ Assignment of Construction Contract Samples
Assignment is the right to transfer ‘choices in action,’ which are described as ‘all personal property rights that may only be claimed or enforced through action rather than physical ownership.’ Benefits deriving from a construction contract, such as the right to payment, are included in this definition, but obligations, such as the responsibility to pay, are excluded. Claims for breach of contract are also included in the term. A typical misconception is to assume that the right to assign must be agreed as part of a contract, like a novation. Assignment is a unilateral right created by statute. While the right to assign is not a contractual right, it can be excluded or limited by contract. It is usual in collateral warranties to limit the right to assign to one assignment without the approval of the warrantor.
1. Assignment of Construction Contract
2. Collateral Assignment of Construction Contract
3. Development Assignment of Construction Contract
4. Assignment of Construction Services Contract
5. Assignment Assumption of Construction Contract
6. Assignment of Construction Engineering Contract
7. Assignment of Road Construction Contract
8. Assignment of Construction Agreement Contract
9. Assignment of Construction Work Contract
10. Sample Assignment of Construction Contract
11. Assignment of Residential Construction Contract
Assignment of Construction Contracts
Even if an assignment does not follow the above rules, it may nonetheless be successful as an equitable assignment. Indeed, a fair assignment can be given verbally. There are no significant distinctions between legal and equitable assignments (albeit a legal assignment will be easier to show), but there are procedural differences.
A legal assignment’s assignee sues the debtor in his or her own name. The assignee of an equitable assignment of a legal choice in action or a non-absolute equitable choice must participate the assignor in any legal actions (as claimant if the assignor agrees, or defendant if the assignor does not).
A legal or equitable assignment has the effect of putting the assignee in the same position as the assignor in terms of the advantages (not the burdens) coming from the original debtor transaction. Consequently:
‘… A debt that becomes due before the assignee receives notice of assignment, whether or not it is payable before that date, or a debt that arises from the same contract as the assigned debt, or is closely related to that contract, may be set off against the assignee.’
(Ref. Business Computers Ltd v Anglo African Leasing Ltd.)
The debtor may also pursue a counterclaim for unpaid damages, but only up to the amount of the assigned debt. Furthermore, when there have been consecutive assignments, the debtor cannot set off counterarguments against intermediate assignees against allegations by the ultimate assignee.
What is an assignment?
A right or an interest vested in one party (the ‘assignor’) is transferred to another party (the ‘assignee’). The assignee of a legitimate assignment has the right to demand that a contractual obligation be fulfilled. Only rights (a contract’s ‘benefit’) can be assigned; if the contract’s responsibilities (the ‘burdens’) are to be transferred, the parties will need to engage into a novation agreement.
What is the purpose of an assignment clause?
An assignment clause specifies which, if any, of a party’s contractual duties and rights may be assigned or passed to another party.
If you want to see more samples and formats, check out some assignment of construction contract samples and templates provided in the article for your reference.
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