Assignment of Contract under New York Law

Assignment of Contract under New York Law: What You Need to Know

The assignment of a contract occurs when one party transfers their rights and obligations to another party. In New York, assigning a contract can be dictated by a variety of laws and regulations. As a professional, I’ve put together this article to help you understand the assignment of contract under New York law.

The Basic Definition of Assignment of Contract

In New York, assignment of contract has a specific definition. It refers to a situation where one party (assignor) transfers their contractual rights and obligations to another party (assignee). This means that the assignee steps into the shoes of the assignor, and becomes responsible for fulfilling the obligations and receiving the benefits of the contract.

The Assignment Process

Under New York law, the assignment process can be either a legal or an equitable transfer. Legal assignment requires that the assignee receives notice of the assignment, and the assignor must obtain the consent of the other party to the contract. On the other hand, equitable assignment is a transfer that doesn’t require a notice or consent.

Legal and equitable assignments can also be distinguished by the nature of the rights assigned. In a legal assignment, the assignee steps into the shoes of the assignor and acquires all the rights and obligations under the contract. In an equitable assignment, the assignee only acquires the right to receive the benefits of the contract, but not the obligation to perform it.

Prohibitions on Assignment

There are some situations where New York law prohibits the assignment of a contract. One of these is where the contract specifically states that it cannot be assigned. In that case, the assignment would be considered void or unenforceable.

Another circumstance where assignment is prohibited is when it would materially change the obligations of the obligor. This means that if the assignor transfers their obligations to an assignee who cannot perform them as well as the original party, the assignment might not be permitted.

Conclusion

In conclusion, the assignment of contract under New York law is a complex process that requires an understanding of the specific laws that govern it. As a professional, I’ve given you the basics of what you need to know about assignment. You should always consult with a legal professional to ensure that you are complying with all applicable laws and regulations.