What does assignment of a contract entail?

What does assignment of a contract entail?

• A. Termination of the original contract
• B. Transfer of rights with the original party still responsible
• C. Creation of a new contract with new terms
• D. Complete transfer of obligations

Answer: (B)

The assignment of a contract primarily involves the transfer of rights from one party to another while keeping the original party still responsible for the obligations under the contract. In this scenario, the assignor (the original party) transfers their rights to receive benefits from the contract to the assignee (the new party), but remains liable for fulfilling any obligations outlined in that contract. This means that if the assignee fails to perform or fulfill the contract's terms, the assignor can still be held accountable. The essence of an assignment is to allow the original party to delegate performance without completely disengaging from the contract. This concept is distinct from termination or creation of a new contract, as the contract remains intact and enforceable, only with a different party assuming certain rights. Understanding this distinction is crucial in real estate transactions where contracts are commonly assigned.

The assignment of a contract primarily involves the transfer of rights from one party to another while keeping the original party still responsible for the obligations under the contract. In this scenario, the assignor (the original party) transfers their rights to receive benefits from the contract to the assignee (the new party), but remains liable for fulfilling any obligations outlined in that contract.

This means that if the assignee fails to perform or fulfill the contract's terms, the assignor can still be held accountable. The essence of an assignment is to allow the original party to delegate performance without completely disengaging from the contract. This concept is distinct from termination or creation of a new contract, as the contract remains intact and enforceable, only with a different party assuming certain rights. Understanding this distinction is crucial in real estate transactions where contracts are commonly assigned.