In a contract, the word assigns refers to the people or entities that receive a transfer of rights from one of the original parties. It is a synonym for assignees. The definition of “assigns” in contracts matters most in the boilerplate phrase “successors and assigns,” which tells you the agreement’s benefits and obligations can pass to new holders. The party handing the rights over is the assignor; whoever ends up holding them is the assign.
The Restatement (Second) of Contracts describes assignment as the assignor showing an intention to transfer a right, which wipes out the assignor’s claim to performance and creates that same claim in the assignee.1Practical Guidance. Restatement (2d) of Contracts 317 – Assignment of a Right No magic words are required. An assignment can be oral or written and does not need to use the word “assignment” at all. Courts look for a clear intention to transfer a specific right at the time of the handoff. Assignments involving real property interests generally must be in writing to satisfy the statute of frauds, and written assignments are the safer choice in every context because they cut off later disputes about whether the transfer happened.
What Rights Can Be Assigned
Most contractual rights are freely transferable unless something specific blocks them. A right cannot be assigned when the transfer would materially change what the other party has to do, increase their risk, or reduce their likelihood of receiving the performance they bargained for.1Practical Guidance. Restatement (2d) of Contracts 317 – Assignment of a Right A statute, public policy, or the contract itself can also block the transfer.
Rights that commonly change hands include:
- Accounts receivable and payment rights. A business owed money under a contract can assign that right to a lender or buyer, with Article 9 of the Uniform Commercial Code governing transfers that involve security interests or commercial payment rights.2The American Law Institute. PEB Commentary No. 21 – Use of the Term Assignment in Article 9 of the Uniform Commercial Code
- Lease interests, where a tenant transfers their interest to a new party if the lease permits it.
- Intellectual property, where patents, trademarks, and copyrights pass through formal assignments so the new owner can enforce them.
Personal service contracts are the classic exception. When the other party bargained for a particular person’s skills, judgment, or reputation, the law treats the right as personal and non-assignable. A studio that hired a specific producer cannot be forced to accept whoever that producer decides to hand the deal off to. Rights that do not yet exist also cannot be assigned; the right must be real and present at the time of the transfer.
Assignment vs. Delegation of Duties
This is the split that trips people up the most. Assignment transfers rights, meaning the benefits you receive under a contract. Delegation transfers duties, meaning the obligations you owe. The two often travel together, but they are legally separate.
Under the UCC, when someone assigns “the contract” or “all my rights under the contract,” that language operates as both an assignment of rights and a delegation of duties unless context suggests otherwise. The assignee who accepts the transfer effectively promises to perform the delegated duties, and either the assignor or the other original party can enforce that promise.3Legal Information Institute. Uniform Commercial Code 2-210 – Delegation of Performance; Assignment of Rights
Delegation is more restricted. A party cannot delegate performance when the other side has a real stake in having the original person do the work.3Legal Information Institute. Uniform Commercial Code 2-210 – Delegation of Performance; Assignment of Rights A homeowner who hired a specific architect cannot be forced to accept a substitute. A contract for delivering commodity goods can usually be delegated freely because the other party has no interest in who drives the truck.
What the Assignee Actually Receives
The assignee steps into the assignor’s shoes and takes exactly the rights the assignor held. No more. If those rights were limited or subject to conditions, the assignee takes them with the same limitations. This protects the other party from being put in a worse position by a transfer they had no part in arranging.
That protection extends to defenses. The other party can raise against the assignee any defense or claim they could have raised against the original assignor, including claims arising from the underlying transaction. They can also assert defenses that developed before they received notice of the assignment.4Legal Information Institute. Uniform Commercial Code 9-404 – Rights Acquired by Assignee; Claims and Defenses If the assignor delivered defective goods and then assigned the right to payment, the buyer can raise those defects against the new holder.
Notification is what shifts the payment obligation. Once a debtor receives proper notice that a payment obligation has been assigned, they must pay the assignee. Before that notice arrives, the debtor can still pay the original party and get full credit for it.5Legal Information Institute. Uniform Commercial Code 9-406 – Discharge of Account Debtor; Notification of Assignment Assignees who delay sending notice risk having the debtor pay the wrong person with no obligation to pay again.
Does the Assignor Stay Liable
Usually, yes. If you assign your contract rights and delegate your duties to someone else, and that person fails to perform, the original counterparty can still come after you. Neither the delegation itself nor an agreement between the assignor and the assignee discharges the assignor’s obligations, unless the other party agrees otherwise.6Practical Guidance. Restatement (2d) of Contracts 318 – Delegation of Performance of Duty
The only clean way to escape liability after handing off a contract is a novation. A novation replaces the original contract with a new one that substitutes a new party for the departing one. It requires consent from everyone involved. The other contracting party must affirmatively agree to release the original party and accept the new one. Without that agreement, no novation exists and the original party stays liable regardless of what they told the assignee.
This matters most in commercial leases and long-term service agreements. A tenant who assigns a lease to a new occupant remains responsible for rent unless the landlord explicitly agrees to release them through a novation. Finding a replacement, on its own, is not enough.
Anti-Assignment Clauses
Many contracts include provisions restricting or prohibiting assignment. On paper they look airtight; courts often read them more narrowly than the drafter intended.
A clause that prohibits assignment of “the contract” is generally read as barring only the delegation of the assignor’s performance obligations, not the assignment of rights to receive payment or other benefits.3Legal Information Institute. Uniform Commercial Code 2-210 – Delegation of Performance; Assignment of Rights Even where the contract specifically prohibits assignment of rights, the assignment often remains effective. The non-assigning party gets a breach-of-contract claim, but the transfer itself is not automatically void. Only language that explicitly declares any assignment “void” or “invalid” tends to actually kill the transfer.
For commercial payment rights, the restrictions are weaker still. The UCC renders anti-assignment clauses ineffective when they attempt to block the assignment of accounts receivable, promissory notes, or similar payment rights.5Legal Information Institute. Uniform Commercial Code 9-406 – Discharge of Account Debtor; Notification of Assignment A clause in a vendor agreement stating that accounts may not be assigned is largely unenforceable against a lender who takes an assignment of those receivables. If you are drafting a contract and genuinely want to block assignments, vague language will not do the job. The clause needs to state that any assignment made in violation is void, and even then it may not hold up for payment rights.
The Successors and Assigns Clause
Almost every commercial contract carries some version of “this agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.” The phrase signals that the contract survives changes in who holds the interests on each side.
Successors and assigns cover different scenarios. Successors take over by operation of law, such as when a company merges into another entity and the surviving company absorbs the original’s obligations automatically. Assigns take over through a voluntary transfer, where one party actively hands off rights to a new holder. Lenders and investors rely on this language to know that the deals supporting an asset portfolio will survive a transaction, and without it a change in corporate ownership could leave a party unable to enforce the previous owner’s contractual promises.
The clause has limits that people overestimate. It generally works for corporate mergers and similar transactions where the successor inherits obligations by statute. It does not automatically force a future buyer of a business to honor the contract in an asset sale. Whether the buyer is bound depends on whether they actually agreed to assume the obligations, not on the boilerplate. Treating “successors and assigns” as a substitute for getting a new party’s express commitment to perform is a common and expensive mistake.