Legal Definitions - assignment of rights

Assignment of Rights refers to the legal process where one party, known as the assignor, transfers a specific benefit or entitlement they hold to another party, known as the assignee. This transfer often occurs within the context of a contract, meaning the assignee gains the right to receive what the assignor was originally entitled to under that agreement. Essentially, the assignor gives up their claim to a particular right, and the assignee steps into their place to claim that right.

• Example 1: Business Selling Accounts Receivable

  Imagine "Tech Innovations Inc." sells its software to various clients, who often pay 60 or 90 days after receiving an invoice. Tech Innovations Inc. needs immediate cash flow to fund a new project. They enter into an agreement with "Rapid Cash Solutions," a financial company, to sell their outstanding invoices. Tech Innovations Inc. assigns its right to collect payment from its clients to Rapid Cash Solutions.

  How it illustrates the term: Tech Innovations Inc. (the assignor) transfers its contractual right to receive money from its clients to Rapid Cash Solutions (the assignee). Rapid Cash Solutions now legally possesses the right to collect those payments directly from Tech Innovations Inc.'s clients, and the clients are typically notified to pay Rapid Cash Solutions instead of Tech Innovations Inc.

• Example 2: Landlord Transferring Lease Income

  Ms. Chen owns a commercial property with a long-term tenant, "Bistro Delight," which pays monthly rent. Ms. Chen decides to sell the property to Mr. Davies. As part of the property sale, Ms. Chen assigns her rights as the landlord to Mr. Davies, including the right to collect all future rent payments from Bistro Delight under the existing lease agreement.

  How it illustrates the term: Ms. Chen (the assignor) transfers her contractual right to receive rent payments from Bistro Delight to Mr. Davies (the assignee). Upon the assignment, Mr. Davies legally assumes Ms. Chen's position regarding the collection of rent from Bistro Delight, and Bistro Delight will now pay rent directly to Mr. Davies.