Legal Definitions - assignee

An assignee is the individual or entity that receives a transfer of rights, benefits, or sometimes obligations from another party. This transfer, known as an assignment, means the original holder of the right (the assignor) passes it on to the assignee. This concept is common in both contract law, where rights and duties under an agreement can be transferred, and property law, involving the transfer of interests in assets.

Here are a few examples to illustrate the role of an assignee:

• Example 1: Accounts Receivable

  Imagine "BrightSpark Consulting" has provided services to several clients and is awaiting payment on outstanding invoices. To improve its immediate cash flow, BrightSpark decides to sell these invoices (which represent the right to receive payment) to "CashFlow Solutions Inc.," a financial company.

  In this scenario, CashFlow Solutions Inc. is the assignee. BrightSpark Consulting (the assignor) has transferred its right to collect payment from the clients to CashFlow Solutions Inc. CashFlow Solutions Inc. now holds the legal right to pursue those payments directly from BrightSpark's clients.

• Example 2: Intellectual Property Royalties

  Consider a successful songwriter, Maya, who has a contract with a music publisher entitling her to a percentage of all future song sales and streams (royalties). Maya decides to sell her future royalty stream for her most popular song to "Melody Investments LLC" in exchange for a large lump sum payment today.

  Here, Melody Investments LLC is the assignee. Maya (the assignor) has transferred her contractual right to receive future royalty payments from her publisher to Melody Investments LLC. The investment firm now legally holds the right to collect those royalties as they accrue.

• Example 3: Service Contract Transfer

  Suppose "CleanSweep Services," a commercial cleaning company, decides to sell its entire portfolio of ongoing cleaning contracts for a specific office park to "Sparkle & Shine Co.," another cleaning business. The contracts include CleanSweep's right to receive payment and its duty to provide cleaning services to the office park tenants.

  In this case, Sparkle & Shine Co. is the assignee. CleanSweep Services (the assignor) has transferred both the rights (to receive payment) and the duties (to perform cleaning services) associated with those contracts to Sparkle & Shine Co. Sparkle & Shine Co. now has the right to collect fees and the obligation to provide the cleaning services to the office park tenants.