Legal Definitions - absolute assignment

An absolute assignment is a complete and unconditional transfer of all rights, title, and interest in a specific property, claim, or benefit from one party (the assignor) to another party (the assignee). Once an absolute assignment is made, the assignor gives up all ownership and control, and the assignee becomes the sole owner of those rights or property. There are no conditions, reservations, or remaining interests held by the original owner; the transfer is final and irreversible.

• Example 1: Life Insurance Policy

  A policyholder has a life insurance policy and decides to irrevocably transfer full ownership of the policy to their adult child. This transfer includes the right to change beneficiaries, borrow against its cash value, or surrender the policy. The original policyholder notifies the insurance company of this change.

  This is an absolute assignment because the original policyholder (assignor) has completely relinquished all rights and control over the policy to their child (assignee). The child now owns the policy outright, and the original policyholder has no remaining interest or ability to make decisions about it.

• Example 2: Contractual Payment Rights

  A small construction company completes a project for a client and is owed a final payment of $50,000, due in 60 days. To improve immediate cash flow, the construction company enters into an agreement with a financial factoring firm, absolutely assigning their right to receive that future $50,000 payment from the client to the factoring firm. In return, the factoring firm pays the construction company $48,000 immediately.

  This constitutes an absolute assignment because the construction company (assignor) has completely transferred its right to collect the payment from the client to the factoring firm (assignee). The factoring firm now has the sole legal right to demand and receive that $50,000 directly from the client, and the construction company no longer has any claim to it.

• Example 3: Royalty Rights from Intellectual Property

  A novelist has a contract with a publisher that entitles them to a percentage of royalties from the sales of their best-selling book. The novelist decides to sell all future royalty rights for that specific book to an investment company for a significant lump sum payment.

  This is an absolute assignment because the novelist (assignor) has completely and permanently transferred all their future entitlement to royalties from that particular book to the investment company (assignee). The novelist will no longer receive any royalty payments for that book; all such payments will go directly to the investment company.