Bitesize Boilerplate: Small Clauses, Big Impact - Focus On Assignment

Assignment and other dealings clauses typically seek to control who can perform the contract and who can receive any benefit under the contract. Note that for the purposes of this alert we have not dealt with sub-contracting rights as this will be the subject of a separate alert in this series.

What does an assignment and other dealings clause do?

If assignment is permitted it enables a party to transfer that party’s rights under a contract to a third party, but not its obligations i.e. a party can transfer the benefit but not the burden under a contract.

For example, if a cleaning supplier assigned its contract to a third party, then the third party will get the benefit of the contract (i.e. the right to receive payment) but the burden of the contract (i.e. the obligation to provide cleaning services) will not transfer. This means the original cleaning company remains liable to the customer for the performance of the contract, and therefore the original cleaning company will