One of the key considerations in structuring merger and acquisition (M&A) transactions is determining which contracts of the target company, if any, will remain in effect for the acquiror following closing. This post will briefly outline: (1) the general rules of contract assignment; (2) the effect of anti-assignment clauses and other exceptions to the general rule of assignability; and (3) the effect of four common M&A structures on contract assignment.
The general rule is that contracts are freely assignable unless the contract itself, a statute, or public policy dictates otherwise. This is true in Washington State, where courts have found that contractual rights are generally transferable unless the contract expressly prohibits assignment in “very specific” and “unmistakable terms.”
The exceptions to the general rule of free assignability fall into two broad categories: (1) contractual prohibitions on free assignability (“anti-assignment clauses”) and (2) case law prohibitions on free assignability of certain types of contracts that arise out of public policy concerns.
Anti-Assignment Clauses
In light of the general rule of free assignability, most business contracts contain a clause – commonly referred to as an “anti-assignment clause” – that expressly prohibits the assignment of contractual rights without the consent of the other party to the contract. These anti-assignment clauses typically take one of two forms. The first, which we will call “simple” anti-assignment clauses, simply prohibit the contractual right from being assigned without the consent of the other party to the contract. For example, a simple anti-assignment clause might state:
This contract shall not be assigned or transferred by Party X without first obtaining the consent of Party Y.
While simple anti-assignment clauses are generally enforceable, certain types of M&A deal structures effectively circumvent such provisions and, accordingly, the necessity of third-party consents (see the discussion below regarding the impact of M&A deal structures on contract assignment for more detail).
Comprehensive Anti-Assignment Provisions
In response to the inability of “simple” anti-assignment clauses to protect contractual rights in certain M&A contexts, many contracts include more robust anti-assignment provisions designed to require third party consent prior to an M&A event, even where the content itself will not be transferred. For example, a comprehensive anti-assignment clause might state:
Party X shall not assign this Agreement in whole or in part without Party Y’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Any change in control of Party X resulting from a merger, consolidation, stock transfer or asset sale shall be deemed an assignment or transfer for purposes of this Agreement that requires Party Y’s prior written consent.
Courts will generally enforce these types of comprehensive anti-assignment clauses and conclude that consummation of a change of control transaction without consent is a breach of contract. Accordingly, to assign contracts with comprehensive anti-assignment provisions, the target must seek the consent of the counterparties to each such contract. Obtaining third party consents in connection with M&A transactions may create sticky situations or cause costly delays. The target company may not want their customers, suppliers or others to know that they are going through an M&A event, while the acquiror may want assurances that important contracts will remain in place. What is more, certain contract counterparties may use the leverage of their consent to renegotiate the terms of the contract or extract concessions from the target company. Accordingly, it is important that the parties identify and address comprehensive anti-assignment clauses early in the process – particularly where the contracts to be acquired make up a large portion of a target company’s value.
Contracts That Involve a “Personal” Right
Contracts involving “personal rights” or contracts deemed “personal” by contractual recital or federal law are considered non-assignable or non-transferable unless specific consent is given by the non-assigning party. Generally, “personal” contracts are those that contemplate personal services, skills or performance from the non-assigning party, such as employment, consulting, and partnership agreements. Courts have found that these types of agreements are not freely assignable as a matter of public policy because assigning personal contracts may result in materially adverse consequences (e.g., a material change in duty, risk, or burden) to the non-assigning party. In addition to general contracts for personal services discussed above, courts have also found many types of intellectual property (IP) licenses to be “personal” in nature due to the profound importance of an IP holder’s right to choose who may use the protected IP. Accordingly, non-exclusive IP license rights pertaining to copyright, trademark, and patent licenses are generally considered non-assignable, unless specific consent is given by the non-assigning party. Personal contracts are also treated differently from other types of contracts in the context of M&A events (see the discussion below regarding the impact of M&A deal structures on contract assignment for more detail). Each of the types of “personal” contracts described above should receive heightened contract-by-contract due diligence to ensure that assignment does not violate applicable law.
Other Considerations
Courts may also consider the subject matter of the contract and the material risks associated with transferring those rights to the acquiror. For example, where the non-merging entity is a competitor to the acquiring entity, courts may find that given the high risk and burden to the non-merging party, the assignment is ineffective on equitable grounds.
The structure employed in a given M&A transaction is critical to determining the treatment of the target company’s various contractual rights. This section will examine the treatment of contractual rights in connection with four common M&A structures: (i) reverse triangular mergers, (ii) forward-triangular mergers, (iii) stock purchases, and (iv) asset purchases. For more information regarding M&A deal structures, please see here and here . While reviewing each of the deal structures that follow, please note that each of the general rules are subject to the exceptions discussed above.
Reverse Triangular Merger
A reverse triangular merger occurs when an acquiror forms a subsidiary and the newly created subsidiary merges with and into the target company. The target survives as a wholly-owned subsidiary of the acquiror following the merger, and continues to own its assets, owe its liabilities, and be party to its contracts.
In a reverse triangular merger, simple anti-assignment clauses generally are not triggered because, as a matter of law, no assignment of the contract has occurred (the target company survives and is the same legal entity as the original contracting party). Accordingly, the contracts of the target remain with the surviving entity without the need to obtain third party consents or take other action. Despite the general rule that no assignment occurs in connection with a reverse triangular merger, thorough contract-by-contract due diligence is still required to identify all contracts that include comprehensive anti-assignment provisions and/or may be deemed to be contracts for personal services (and therefore require consent) under applicable law.
Forward Triangular Merger
In a forward triangular merger, the acquiring entity forms a subsidiary corporation and the target corporation merges directly with and into the newly created subsidiary. As a result, the subsidiary survives the merger. Under this structure, the subsidiary obtains all of the target company’s assets and liabilities by operation of law.
Simple anti-assignment clauses are generally not triggered in a forward triangular merger because the rights are vested, and not assigned, by operation of law. Therefore, the target’s contracts generally transfer automatically to the acquiror without the need to obtain third party consents. However, courts have created considerable ambiguity around the applicability of this general rule in the context of forward triangular mergers. Accordingly, acquirors frequently require target companies to obtain third party consent as a matter of risk allocation and to create certainty that important contracts will remain in place after the merger. As with the above, contract-by-contract due diligence is required to identify contracts that contain anti-assignment language or may be considered to be “personal.”
Direct Stock Purchase
In a direct stock purchase, the acquiror purchases all the outstanding shares of the target directly from its stockholders. Instead of owning certain assets and related liabilities, the acquiror owns the entire selling company. The selling company continues to exist as a separate legal entity and wholly-owned subsidiary of the acquiror (assuming 100% of the outstanding stock is purchased).
In a sale of the target company through a direct stock purchase, the individual assets of the target company (including its material contracts) need not be separately assigned because only the ownership rights of the target are being transferred. Like a reverse triangular merger, a direct stock purchase generally does not trigger a simple anti-assignment provision because the assets are not conveyed to a different entity. Accordingly, the contracts of the selling company remain entirely in place without the need to obtain third party consents. However, contract-by-contract due diligence is required to identify any contracts that contain comprehensive anti-assignment language that would be triggered by the change of control that occurs upon consummation of a stock sale and contracts that may be considered “personal” under applicable law.
Asset Purchase
The sale of some or all of the assets of a company is one method of transferring part or full ownership in the underlying business. In an asset purchase, the acquiror purchases certain enumerated assets and liabilities of the target in exchange for the cash, the acquiror’s stock, or other consideration.
In an asset purchase transaction, the acquiror is only responsible for the assets and liabilities specifically enumerated in the purchase agreement. All other assets and liabilities remain with the target. Without the protection of a merger statute, the purchaser of contractual assets will need to become a party to the purchased contracts through the general rule of assignability (and the absence of any exceptions). Therefore, if a contract purchased as part of an asset sale contains an anti-assignment provision (whether “simple” or “comprehensive”) or may be considered “personal”, then the target company must obtain the consent of the counter party in order to convey the contract to the acquiror. In the event that neither of the exceptions to the general rule apply, then the contract is generally assignable to the acquiror.
Although contracts are generally freely assignable, in the context of any M&A transaction or other proposed contract assignment, careful consideration should be given to: (1) whether the contract in question includes an anti-assignment provision and, if so, whether the provision is “comprehensive” ( i.e. , applies to change of control transactions even where, by operation of law, no assignment would be deemed to occur); (2) whether the contract is “personal” in nature; and (3) how the proposed deal structure impacts the treatment of the target’s contractual rights. Given the fact-specific standards for assignment, each of the target’s contracts should be carefully reviewed during the due diligence phase of an M&A transaction to ensure that they are assigned in compliance with applicable law.
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ASSIGNMENT TO AN AFFILIATE This Agreement may be assigned by the Advisor to an Affiliate with the approval of a majority of the Directors (including a majority of the Independent Directors). The Advisor may assign any rights to receive fees or other payments under this Agreement without obtaining the approval of the Directors. This Agreement shall not be assigned by the Company without the consent of the Advisor, except in the case of an assignment by the Company to a corporation or other organization which is a successor to all of the assets, rights and obligations of the Company, in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Company is bound by this Agreement.
No Assignment to Borrower No such assignment shall be made to the Borrower or any of the Borrower’s Affiliates or Subsidiaries.
No Assignments to the Borrower or Affiliates Anything in this Section to the contrary notwithstanding, no Lender may assign or participate any interest in any Loan or LC Exposure held by it hereunder to the Borrower or any of its Affiliates or Subsidiaries without the prior consent of each Lender.
Transfer and Assignment of Interests Subject to the limitations set forth in the Holdings Operating Agreement, the Member shall be entitled at any time to sell, assign, transfer, pledge, hypothecate or encumber all or part of its interests in Company.
Assignment of Assets Seller hereby contributes, assigns, conveys and transfers to Split-Off Subsidiary, and Split-Off Subsidiary hereby receives, acquires and accepts, all assets and properties of Seller as of the Closing Date (as defined below) immediately prior to giving effect to the Effective Time, including but not limited to the following, but excluding in all cases (i) the right, title and assets of Seller in, to and under the Transaction Documents, and (ii) the capital stock of PrivateCo and Split-Off Subsidiary:
Assignment or transfer fee The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Facility Agent (for its own account) a fee of USD 2,500.
No Assignment to Borrowers No such assignment shall be made to the Borrowers or any of the Borrowers’ Affiliates or Subsidiaries.
Transfer to Affiliates For the avoidance of doubt, transfer of employment among the Company and any of its Affiliates shall not constitute a termination of employment for purposes of this Award.
ASSIGNMENT AND TRANSFER SIGNATURE LINES FOR VALUE RECEIVED, the undersigned Holder hereby sell(s), assign(s) and transfer(s) unto ______________________________ whose taxpayer identification number is _______________________ and whose address including postal zip code is ____________________________, the within Receipt and all rights thereunder, hereby irrevocably constituting and appointing ________________________ attorney-in-fact to transfer said Receipt on the books of the Depositary with full power of substitution in the premises.
Agreement to Sell and Contribute on the Closing Date On the terms and subject to the conditions set forth in this Agreement, Santander Consumer does hereby irrevocably sell, transfer, assign, contribute and otherwise convey to the Purchaser without recourse (subject to the obligations herein) on the Closing Date all of Santander Consumer’s right, title and interest in, to and under the Receivables, the Collections after the Cut-Off Date, the Receivable Files and the Related Security relating thereto, whether now owned or hereafter acquired, as evidenced by an assignment substantially in the form of Exhibit A delivered on the Closing Date (collectively, the “Purchased Assets”). The sale, transfer, assignment, contribution and conveyance made hereunder does not constitute and is not intended to result in an assumption by the Purchaser of any obligation of the Originator to the Obligors, the Dealers, insurers or any other Person in connection with the Receivables or the other assets and properties conveyed hereunder or any agreement, document or instrument related thereto.
When business owners are negotiating contracts to gear up for the sale of their business, they are rightly concerned with key questions such as the sale price for the business including assets such as how much the sale will cost them and what happens if something goes wrong. At the end of the contracts, there are usually several pages of type that usually look like boilerplate. Inside those clauses is usually something called an assignment clause, or more accurately, an anti-assignment clause.
It’s one of those clauses that everyone glosses over – after all, it’s just standard legal text, right?
For a business owner hoping to sell their business, an anti-assignment clause can dissuade potential buyers and play a crucial role in the selling price of a business. If this sounds familiar and you’re in the process of negotiating the merger or acquisition of your business, read on – we’ve put together a practical guide to anti-assignment clauses and what to look out for.
Looking for legal help? feel free to get in touch with our commercial lawyers for matters related to contracts.
The anti-assignment clause states that neither party can transfer or assign the agreement without the consent of the other party. On a basic level, that makes sense – after all, if you sign a contract with a specific party, you don’t expect to be entering into an agreement with a third party you didn’t intend to be.
However, when you sell your business, you will want to transfer ownership of those contracts to the buyer. If your contracts all contain an anti-assignment clause, they effectively restrict you from transferring ownership to the interested party. Now, you’re presented with a new challenge altogether – before you can focus on the sale of your business, you must first renegotiate the terms of your contracts with each party.
If you’re thinking about selling your business or even have potential buyers interested, it’s better to know in advance if you’ve got anti-assignment clauses in your contracts. There are generally two types of anti-assignment clause to look out for. The first relates to the complete bar on assignment of rights and responsibilities and is typically worded in this way, or similar:
“Neither Party may assign, delegate, or transfer this agreement or any of its rights or obligations under this agreement.”
The second type prevents the transfer of rights or duties without prior written consent of the other party. This will read along the lines of:
“Neither this agreement nor any right, interest, or obligation herein may be assigned, transferred, or delegated to a third party without the prior written consent of the other party, and whose consent may be withheld for any reason.”
So, where the first prohibits assignment altogether, the second prohibits assignment unless permission is sought in advance. Some clauses may even explicitly state that a change of control such as a merger or acquisition is an assignment. The last thing you want is to cause a dispute by breaching the contract, but if you’ve already agreed to these terms, you’ll have to open a fresh set of negotiations with the contracting party before you sell the company.
Due diligence is the bread and butter of any merger or acquisition. Rather than a leap of faith, due diligence ensures the purchase of a business is a calculated decision with minimal risk to the buyer. Typically carried out by specialist lawyers, the process is designed to lift the hood on the target business to determine the valuation of assets and liabilities and identify any glaring issues that could leave the buyer open to risk.
During the due diligence process, the buyer will look through all of the major contracts the business has open, and specifically keep a close eye out for assignment clauses.
Despite the virtual environment that many businesses have been forced to operate in in 2020, most companies will have commercial leases for the premises from which they typically work. Almost all leases have an anti-assignment clause, and this is a perfect example of an instance that is often overlooked by commercial tenants when selling a business which includes a leasehold property. This transfer of ownership may well be prohibited under an anti-assignment clause so that prior to the sale of the business, you would be required to ask permission from your landlord. The issue here is that the landlord may well see this as the perfect opportunity to renegotiate and secure a better deal for themselves. What’s worse, if they don’t sign off on the transfer, you’ll have an obstruction on your hands that will stand in the way of the sale.
In any case, an unexpected anti-assignment clause usually winds up being a last-minute hitch in the sale, and it never comes at a good time. Whether it delays the sale or obstructs it altogether, overlooking an anti-assignment clause can cost you considerably in an M&A transaction.
Generally speaking, an anti-assignment clause will be enforced by the courts if it was agreed upon by both parties to the contract. Many contracts exclude or qualify the right to assignment – according to the courts, a clause that states that a party to a contract may not assign the benefit of that contract without the consent of the other party is legally effective and will extend to all rights and benefits arising under the contract.
Courts won’t always enforce assignments to which the counterparty did not give permission, even where there is no anti-assignment clause that specifies this provision.
The best practice for business owners is to be vigilant when negotiating new contracts and ensure that any anti-assignment clauses still allow for the transfer of ownership when they decide to sell the business.
Remember, even though the buyer is purchasing the assets of the business, this usually means that all of the contracts of the business go with it because the business remains intact. Therefore, the best way forward is to negotiate these clauses upfront from the outset of the relationship, so that when you do decide to sell your business, you automatically have permission to transfer the ownership without having to delay the sale by entering into fresh negotiations.
If your agreement does not permit assignments, it’s worth seeking the advice and support of a specialist lawyer who can help protect your interests through negotiation with your counterparty on this point. You may be able to include a provision that allows for assignment of your rights and obligations upon the prior written consent of the other party. Your lawyer will likely advise you to carve out a specific provision to prohibit the counterparty from unreasonably withholding or delaying consent or making it subject to unreasonable conditions – an issue which, if not provided for within the contract, can cause serious delay and disruption to the sale of your business. Further, it may be beneficial to add an extra element to the contract that makes exceptions to the clause for assignments between affiliates. If you’re planning to sell your business, this would be the right place to carve out an exception within the clause to the change of control via a merger or acquisition.
It’s important to bear in mind that anti-assignment clauses tend to be viewed narrowly by courts, and that there have been several instances whereby anti-assignment clauses have not been enforced since the clause itself did not explicitly state that the assignment of rights, duties or payment would render the contract void or invalid. So, if you’re in the process of negotiating an agreement and wish to protect your interests through the addition of an anti-assignment clause, it’s critical that you include the consequences of assignment within the clause itself and state that assignments would invalidate or be in breach of the contract.
If you do not wish for the counterparty to be able to transfer the legal obligation to perform their duties as stated in the contract to a third party, this must be explicitly stated in one of three ways:
There’s no need to be unreasonable – you can protect your interests while still giving the counterparty the space to re-negotiate should they wish to assign rights by including a clause that asks for consent.
Ask your lawyer to draft an exception into the clause that permits assignment to affiliates or successors to the counterparty, such as:
“Neither party may assign or delegate this agreement or its rights or obligations under this agreement without the prior written consent of the other party, except that no consent is required (a) for assignment to an entity in which the transferring party will own greater than 50 per cent of the shares or other interests; or (b) in connection with any sale, transfer, or disposition of all or substantially all of its business or assets; provided that no such assignment will relieve an assigning party of its obligations under this agreement. Any assignment or delegation that violates this provision shall be void.”
Just as you would not wish for consent to be held back from you unreasonably in the renegotiation of contract terms prior to a sale, your assignment clause should make clear that you will not unreasonably withhold or delay consent should the third party request permission to assign their legal obligations. This may read something like this:
“Neither party may assign or delegate this agreement or its rights or obligations under this agreement without the prior written consent of the other party, whose consent shall not be unreasonably withheld or delayed. Any assignment or delegation that violates this provision shall be void.”
Whatever the circumstances, we strongly recommend calling upon a contract law specialist, whether you’re undergoing due diligence in the run up to an M&A transaction, are considering selling your business or are negotiating new contracts with customers and suppliers. Our lawyers bring in-depth expertise in the area of anti-assignment clauses and will work closely with you to protect your interests and ensure no clauses in your contracts negatively impact the sale of your company.
For a free consultation, get in touch with our team through the contact form below or using our online chat service.
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(page 2 of 2 of what is an assignment of contract).
You'll need to follow three basic steps to assign a contract .
Step 1: Examine the contract for any limitations or prohibitions. Check for anti-assignment clauses. Sometimes the prohibition is not a separate clause but is included in another provision. Look for language that states, "This agreement may not be assigned." If you find such language, you may not be able to assign the agreement unless the other party consents.
Step 2: Execute an assignment. If you are not prohibited from assigning the contract, prepare and enter into an assignment of contract: an agreement that transfers the parties' rights and obligations.
Step 3: Provide notice to the obligor. After you have assigned your contract rights to the assignee, you should provide notice to the other original contracting party (referred to as the obligor). This notice will effectively relieve you of any liability under the contract unless the contract says differently (for instance, if the contract says that the assignor guarantees the performance of the assigned contract or the contract prohibits an assignment) or the assignment is prohibited by law.
If you're making a contract and you don't want assignment to be an option, you need to clearly state that in your agreement. Below are three variations of anti-assignment clauses that can be used in a contract.
EXAMPLE 1: Consent Required for Assignment
Assignment. Neither party may assign or delegate its rights or obligations pursuant to this Agreement without the prior written consent of the other. Any assignment or delegation in violation of this section shall be void.
EXAMPLE 2: Consent Not Needed for Affiliates or New Owners
Assignment. Neither party may assign or delegate its rights or obligations pursuant to this Agreement without the prior written consent of the other. However, no consent is required for an assignment that occurs (a) to an entity in which the transferring party owns more than 50% of the assets, or (b) as part of a transfer of all or substantially all of the assets of the transferring party to any party. Any assignment or delegation in violation of this section shall be void.
EXAMPLE 3: Consent Not Unreasonably Withheld
Assignment. Neither party may assign or delegate its rights or obligations pursuant to this Agreement without the prior written consent of the other. Such consent shall not be unreasonably withheld. Any assignment or delegation in violation of this section shall be void.
Anti-assignment clauses can also be modified to prohibit only one of the parties from assigning rights. Also, when preparing an anti-assignment clause, keep in mind that you can prevent only "voluntary" assignments; you can't prevent assignments that are ordered by a court or that are mandatory under law—for example, in a bankruptcy proceeding.
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An assignment clause governs whether and when a party can transfer the contract to someone else. Often, it covers what happens in a change of control: whether a party can assign the contract to its buyer if it gets merged into a company or completely bought out. But that doesn’t make it a change of control clause. Change of control terms don’t address assignment. They say whether a party can terminate if the other party goes through a merger or other change of control. And they sometimes address other change of control consequences.
Don’t confuse the two. In a contract about software or other IT, you should think through the issues raised by each. (Also, don’t confuse assignment of contracts with assignment of IP .)
Here’s an assignment clause:
Assignment. Neither party may assign this Agreement or any of its rights or obligations hereunder without the other’s express written consent, except that either party may assign this Agreement to the surviving party in a merger of that party into another entity or in an acquisition of all or substantially all its assets. No assignment becomes effective unless and until the assignee agrees in writing to be bound by all the assigning party’s obligations in this Agreement. Except to the extent forbidden in this Section __, this Agreement will be binding upon and inure to the benefit of the parties’ respective successors and assigns.
As you can see, that clause says no assignment is allowed, with one exception:
Consider the following additional issues for assignment clauses:
Here’s a change of control clause:
Change of Control. If a party undergoes a Change of Control, the other party may terminate this Agreement on 30 days’ written notice. (“Change of Control” means a transaction or series of transactions by which more than 50% of the outstanding shares of the target company or beneficial ownership thereof are acquired within a 1-year period, other than by a person or entity that owned or had beneficial ownership of more than 50% of such outstanding shares before the close of such transactions(s).)
Change of control and assignment terms actually address opposite ownership changes. If an assignment clause addresses change of control, it says what happens if a party goes through an M&A deal and no longer exists (or becomes a shell company). A change of control clause, on the other hand, matters when the party subject to M&A does still exist . That party just has new owners (shareholders, etc.).
Consider the following additional issues for change of control clauses:
Some of this text comes from the 3rd edition of The Tech Contracts Handbook , available to order (and review) from Amazon here , or purchase directly from its publisher, the American Bar Association, here.
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An assignment clause (AC) is an important part of many contracts, especially for real estate. In this article we discuss:
What is an assignment clause.
An AC is part of a contract governing the sale of a property and other transactions. It deals with questions regarding the assignment of the property in the purchase agreement. The thrust of the assignment clause is that the buyer can rent, lease, repair, sell, or assign the property.
To “assign” simply means to hand off the benefits and obligations of a contract from one party to another. In short, it’s the transfer of contractual rights.
Explicitly, an AC expresses the liabilities surrounding the assignment from the assignor to the assignee. The real estate contract assignment clause can take on two different forms, depending on the contract author:
The contract’s assignment clause states the “buyer and/or assigns.” In this clause, “assigns” is a noun that means assignees. It refers to anyone you choose to receive your property rights.
The assignment provision establishes the fact that the buyer (who is the assignor) can assign the property to an assignee. Upon assignment, the assignee becomes the new buyer.
The AC conveys to the assignee both the AC’s property rights and the AC’s contract obligations. After an assignment, the assignor is out of the picture.
This is an example of a real estate contract assignment clause :
“The Buyer reserves the right to assign this contract in whole or in part to any third party without further notice to the Seller; said assignment not to relieve the Buyer from his or her obligation to complete the terms and conditions of this contract should be assigning default.”
Assignment provision.
An assignment provision is a separate clause that states the assignee’s acceptance of the contract assignment.
Here is an example of an assignment provision :
“Investor, as Assignee, hereby accepts the above and foregoing Assignment of Contract dated XXXX, XX, 20XX by and between Assignor and ____________________ (seller) and agrees to assume all of the obligations and perform all of the duties of Assignor under the Contract.”
An anti-assignment clause prevents either party from assigning a contract without the permission of the other party. It typically does so by prohibiting payment for the assignment. A non-assignment clause is another name for an anti-assignment clause.
This is an anti-assignment clause example from the AIA Standard Form of Agreement:
” The Party 1 and Party 2, respectively, bind themselves, their partners, successors, assigns, and legal representatives to the other party to this Agreement and to the partners, successors, assigns, and legal representatives of such other party with respect to all covenants of this Agreement. Neither Party 1 nor Party 2 shall assign this Agreement without the written consent of the other.”
The presence of an AC triggers several important considerations.
In essence, the assignor is a broker that brings together a buyer and seller. As such, the assignor collects a fee for this service. Naturally, the assignor doesn’t incur the normal expenses of a buyer.
Rather, the new buyer assumes those expenses. In reality, the assignment fee replaces the fee the realtor or broker would charge in a normal transaction. Frequently, the assignment fee is less than a regular brokerage fee.
For example, compare a 2% assignment fee compared to a 6% brokerage fee. That’s a savings of $200,000 on a $5 million purchase price. Wholesalers are professionals who earn a living through assignments.
Frequently, the assignor will require that the assignee deposit the fee into escrow. Typically, the fee is not refundable, even if the assignee backs out of the deal after signing the assignment provision. In some cases, the assignee will fork over the fee directly to the assignor.
Just because the contract contains an AC does not obligate the buyer to assign the contract. The buyer remains the buyer unless it chooses to exercise the AC, at which point it becomes the assignor. It is up to the buyer to decide whether to go through with the purchase or assign the contract.
Nonetheless, the AC signals the seller of your possible intent to assign the purchase contract to someone else. For one thing, the seller might object if you try to assign the property without an AC.
You can have serious problems at closing if you show up with a surprise assignee. In fact, you could jeopardize the entire deal.
Another thing to consider is whether the buyer’s desire for an AC in the contract will frighten the seller. Perhaps the seller is very picky about the type of buyer to whom it will sell.
Or perhaps the seller has heard horror stories, real or fake, about assignments. Whatever the reason, the real estate contract assignment clause might put a possible deal in jeopardy.
If you assign a property before the closing, you will not be in the chain of title. Obviously, this differs from the case in which you sell the property five minutes after buying it.
In the latter case, your name will appear in the chain of title twice, once as the buyer and again as the seller. In addition, the latter case would involve two sets of closing costs, whereas there would only one be for the assignment case. This includes back-to-back (or double) closings.
Assignment might not be enforceable in all situations, such as when:
Also note that REO (real estate owned) properties, HUD properties, and listed properties usually don’t permit assignment contracts. An REO property is real estate owned by a bank after foreclosure. Typically, these require a 90-day period before a property can be resold.
The AC is a portion of a purchase agreement. When a purchase involves a commercial property requiring a loan of $10 million or greater, Assets America ® can arrange your financing.
We can finance wholesalers who decide to go through with a purchase. Alternatively, we can finance assignees as well. In either case, we offer expedient, professional financing and many supporting services. Contact us today for a confidential consultation.
Normally, a prohibition against assignment does not curb the right to receive payments due. However, circumstances may cause the opposite outcome. Additionally, prohibition doesn’t prevent the right to money that the contract specifies is due.
The assignment of rents clause is a provision in a mortgage or deed of trust. It gives the lender the right to collect rents from mortgaged properties if the borrower defaults. All incomes and rents from a secured property flow to the lender and offset the outstanding debt. Clearly, this benefits the lender.
Commonly, health insurance policies contain assignment of benefits (AOB) clauses. These clauses allow the insurer to pay benefits directly to health care providers instead of the patient. In some cases, the provider has the patient sign an assignment agreement that accomplishes the same outcome. The provider submits the AOB agreement along with the insurance claim.
The clause would allow the assignment of proceeds from a liability award payable to a third party. However, the insured must consent to the clause or else it isn’t binding. This restriction applies only before a loss. After a first party loss, the insurer’s consent no longer matters.
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Great experience with Assets America. Fast turn around. Had a lender in place in 30 minutes looking to do the deal. Totally amazing. Highly recommend them to anyone looking for financing. Ronny is fantastic. Give them a call if the deal makes sense they can get it funded. Referring all our clients.
Assets America guided us every step of the way in finding and leasing our large industrial building with attached offices. They handled all of the complex lease negotiations and contractual paperwork. Ultimately, we received exactly the space we needed along with a lower than market per square foot pricing, lease length and end of term options we requested. In addition to the real estate lease, Assets America utilized their decades-long financial expertise to negotiate fantastic rates and terms on our large and very unique multimillion dollar equipment purchase/lease. We were thankful for how promptly and consistently they kept us informed and up to date on each step of our journey. They were always available to answer each and every one of our questions. Overall, they provided my team with a fantastic and highly professional service!
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My business partner and I were looking to purchase a retail shopping center in southern California. We sought out the services of Ronny, CFO of Assets America. Ronny found us several commercial properties which met our desired needs. We chose the property we liked best, and Ronny went to work. He negotiated very aggressively on our behalf. We came to terms with the Seller, entered into a purchase agreement and opened escrow. Additionally, we needed 80 percent financing on our multimillion-dollar purchase. Assets America also handled the commercial loan for us. They were our One-Stop-Shop. They obtained fantastic, low, fixed rate insurance money for us. So, Assets America handled both the sale and the loan for us and successfully closed our escrow within the time frame stated in the purchase agreement. Ronny did and performed exactly as he said he would. Ronny and his company are true professionals. In this day and age, it’s especially rare and wonderful to work with a person who actually does what he says he will do. We recommend them to anyone needing any type of commercial real estate transaction and we further highly recommend them for any type of commercial financing. They were diligent and forthright on both accounts and brought our deal to a successful closing.
Local security forces brought 15 men to a military enlistment office after a mass brawl at a warehouse of the Russian Wildberries company in Elektrostal, Moscow Oblast on Feb. 8, Russian Telegram channel Shot reported .
29 people were also taken to police stations. Among the arrested were citizens of Kyrgyzstan.
A mass brawl involving over 100 employees and security personnel broke out at the Wildberries warehouse in Elektrostal on Dec. 8.
Read also: Moscow recruits ‘construction brigades’ from Russian students, Ukraine says
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Gagarin cup (khl) finals: atlant moscow oblast vs. salavat yulaev ufa.
21-11-6-16 (91 pts) | 29-9-4-12 (109 pts) | |
12-7 | 12-4 | |
131 : 111 (+20) | 206 : 140 (+66) | |
56 : 39 (+17) | 48 : 29 (+19) | |
31.15 | 33.26 | |
27.10 | 29.81 | |
15.0% (17); 18.9 % (6) | 22.5% (1); 15.4% (9) | |
85.4% (6); 89.2% (3) | 83.4% (11); 84.4% (7) | |
Sergei Mozyakin (27+34=61) | Alexander Radulov (20+60=80) | |
Sergei Mozyakin (7+10=17) | Patrick Thoresen (2+13=15) | |
Dmitry Bykov (21:38) | Miroslav Blatak (20:00) | |
Dmitry Bykov (23:44) | Vitaly Proshkin (21:49) | |
Konstantin Barulin (92.5%) | Erik Ersberg (92.6%) | |
Konstantin Barulin (93.0%) | Erik Ersberg (93.2%) |
Much like the Elitserien Finals, we have a bit of an offense vs. defense match-up in this league Final. While Ufa let their star top line of Alexander Radulov, Patrick Thoresen and Igor Grigorenko loose on the KHL's Western Conference, Mytischi played a more conservative style, relying on veterans such as former NHLers Jan Bulis, Oleg Petrov, and Jaroslav Obsut. Just reaching the Finals is a testament to Atlant's disciplined style of play, as they had to knock off much more high profile teams from Yaroslavl and St. Petersburg to do so. But while they did finish 8th in the league in points, they haven't seen the likes of Ufa, who finished 2nd.
This series will be a challenge for the underdog, because unlike some of the other KHL teams, Ufa's top players are generally younger and in their prime. Only Proshkin amongst regular blueliners is over 30, with the work being shared by Kirill Koltsov (28), Andrei Kuteikin (26), Miroslav Blatak (28), Maxim Kondratiev (28) and Dmitri Kalinin (30). Oleg Tverdovsky hasn't played a lot in the playoffs to date. Up front, while led by a fairly young top line (24-27), Ufa does have a lot of veterans in support roles: Vyacheslav Kozlov , Viktor Kozlov , Vladimir Antipov, Sergei Zinovyev and Petr Schastlivy are all over 30. In fact, the names of all their forwards are familiar to international and NHL fans: Robert Nilsson , Alexander Svitov, Oleg Saprykin and Jakub Klepis round out the group, all former NHL players.
For Atlant, their veteran roster, with only one of their top six D under the age of 30 (and no top forwards under 30, either), this might be their one shot at a championship. The team has never won either a Russian Superleague title or the Gagarin Cup, and for players like former NHLer Oleg Petrov, this is probably the last shot at the KHL's top prize. The team got three extra days rest by winning their Conference Final in six games, and they probably needed to use it. Atlant does have younger regulars on their roster, but they generally only play a few shifts per game, if that.
The low event style of game for Atlant probably suits them well, but I don't know how they can manage to keep up against Ufa's speed, skill, and depth. There is no advantage to be seen in goal, with Erik Ersberg and Konstantin Barulin posting almost identical numbers, and even in terms of recent playoff experience Ufa has them beat. Luckily for Atlant, Ufa isn't that far away from the Moscow region, so travel shouldn't play a major role.
I'm predicting that Ufa, winners of the last Superleague title back in 2008, will become the second team to win the Gagarin Cup, and will prevail in five games. They have a seriously well built team that would honestly compete in the NHL. They represent the potential of the league, while Atlant represents closer to the reality, as a team full of players who played themselves out of the NHL.
Games 5-7 are as yet unscheduled, but every second day is the KHL standard, so expect Game 5 to be on Saturday, like an early start.
635th Anti-Aircraft Missile Regiment
635-й зенитно-ракетный полк
Military Unit: 86646
Activated 1953 in Stepanshchino, Moscow Oblast - initially as the 1945th Anti-Aircraft Artillery Regiment for Special Use and from 1955 as the 635th Anti-Aircraft Missile Regiment for Special Use.
1953 to 1984 equipped with 60 S-25 (SA-1) launchers:
1984 converted to the S-300PT (SA-10) with three independent battalions:
Disbanded 1.5.98.
Subordination:
IMAGES
VIDEO
COMMENTS
Assignment Clause Examples. Examples of assignment clauses include: Example 1. A business closing or a change of control occurs. Example 2. New services providers taking over existing customer contracts. Example 3. Unique real estate obligations transferring to a new property owner as a condition of sale. Example 4.
Assignments.Neither the Company nor the Executive may make any assignment of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other; other party; provided, however, that the Company may assign its rights and obligations under this Agreement without the consent of Executive to a successor to substantially all of the Executive ...
Assignment. Neither party may assign its rights or delegate its obligations under this Agreement without the prior written consent of the other party. Sample 1 Sample 2 Sample 3 See All ( 1k) Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, but shall not ...
Assignment. Assignor assigns to Assignee all of Assignor's right, title, and interest in and to the Purchase Agreement, as amended. 03/25/2020 (Lodging Fund REIT III, Inc.) Source. to the contrary (a) Manager shall not be obligated to return or refund to Lender any Management Fee or other fee, commission or other amount already received by ...
Ordinarily, the term assignment is limited to the transfer of rights that are intangible, like contractual rights and rights connected with property. Merchants Service Co. v. Small Claims Court, 35 Cal. 2d 109, 113-114 (Cal. 1950). An assignment will generally be permitted under the law unless there is an express prohibition against assignment ...
An assignment clause spells out which contractual obligations, rights, and duties may be transferred from one of the contractual parties to another party. The assignment may be in whole or in part, and the clause also details the conditions under which a party can assign these duties. U.S. law dictates that most contractual rights can be freely ...
An assignment of contract occurs when one party to an existing contract (the "assignor") hands off the contract's obligations and benefits to another party (the "assignee"). Ideally, the assignor wants the assignee to step into their shoes and assume all of their contractual obligations and rights. In order to do that, the other party to the ...
Contract Assignment Agreement. Last revision 01/31/2024. Formats Word and PDF. Size 2 to 3 pages. 4.8 - 105 votes. Fill out the template. This Contract Assignment Agreement document is used to transfer rights and responsibilities under an original contract from one Party, known as the Assignor, to another, known as the Assignee. The Assignor ...
Assignment of contract is when one party, the assignor, wants to transfer its rights or obligations under the contract to a third party, the assignee. Whether that assignment can happen will depend on whether there is an assignment clause within the contract in question. The Cambridge Dictionary defines an assignment clause as the " part of a ...
An assignment clause regulates the extent to which a party's interest in a contract may be assigned to another party; anti-assignment clauses are common because without them, generally, contracts are freely assignable. ... In negotiating an anti-assignment clause, a company would typically seek the exclusion of assignments undertaken in ...
A. First, it's important to understand the purpose of the assignment clause. "Assignment" occurs when a party transfers its rights and obligations under a contract to another party. Generally, unless the parties have agreed otherwise, each can assign its rights and obligations freely. Article 2 of the Uniform Commercial Code, a set of ...
Successors and Assigns.This Agreement shall inure to the benefit of and be binding upon the Company and the Agent Underwriter and their respective its successors and the affiliates, controlling persons, officers and directors parties referred to in Section 10 hereof. 11. References to any of the parties contained in this Agreement shall be deemed to include the successors and permitted assigns ...
The purpose of an assignment clause in a contract is to allow a party transfer a benefit it is entitled to receive under that contract to another party. A contract may simply be described as a ...
One of the key considerations in structuring merger and acquisition (M&A) transactions is determining which contracts of the target company, if any, will remain in effect for the acquiror following closing. This post will briefly outline: (1) the general rules of contract assignment; (2) the effect of anti-assignment clauses and other ...
Download. Assignment to a Group Company. Effective on written notice to the Executive, the Company shall have the right to substitute a Group Company for the Company as a party to this Agreement for any or all of its rights and obligations under this Agreement, whereby the Executive would become an employee of the Group Company. Sample 1.
What is an assignment clause? The anti-assignment clause states that neither party can transfer or assign the agreement without the consent of the other party. On a basic level, that makes sense - after all, if you sign a contract with a specific party, you don't expect to be entering into an agreement with a third party you didn't intend ...
Check for anti-assignment clauses. Sometimes the prohibition is not a separate clause but is included in another provision. Look for language that states, "This agreement may not be assigned." If you find such language, you may not be able to assign the agreement unless the other party consents. Step 2: Execute an assignment.
Change of control and assignment terms actually address opposite ownership changes. If an assignment clause addresses change of control, it says what happens if a party goes through an M&A deal and no longer exists (or becomes a shell company). A change of control clause, on the other hand, matters when the party subject to M&A does still exist.
The assignment of rents clause is a provision in a mortgage or deed of trust. It gives the lender the right to collect rents from mortgaged properties if the borrower defaults. All incomes and rents from a secured property flow to the lender and offset the outstanding debt. Clearly, this benefits the lender.
In 1938, it was granted town status. [citation needed]Administrative and municipal status. Within the framework of administrative divisions, it is incorporated as Elektrostal City Under Oblast Jurisdiction—an administrative unit with the status equal to that of the districts. As a municipal division, Elektrostal City Under Oblast Jurisdiction is incorporated as Elektrostal Urban Okrug.
Local security forces brought 15 men to a military enlistment office after a mass brawl at a warehouse of the Russian Wildberries company in Elektrostal, Moscow Oblast on Feb. 8, Russian Telegram ...
The Gagarin Cup Finals, the championship round of the Kontinental Hockey League playoffs, are about to start today in Ufa, Russia. See how Salavat Yualev Ufa matches up against their Eastern Conference challengers, Atlant Moscow Oblast.
635th Anti-Aircraft Missile Regiment. 635-й зенитно-ракетный полк. Military Unit: 86646. Activated 1953 in Stepanshchino, Moscow Oblast - initially as the 1945th Anti-Aircraft Artillery Regiment for Special Use and from 1955 as the 635th Anti-Aircraft Missile Regiment for Special Use. 1953 to 1984 equipped with 60 S-25 (SA-1 ...