Legal Definitions - assignment pro tanto

Assignment Pro Tanto

An assignment pro tanto refers to the transfer of only a portion of a right, claim, or interest from one party to another, rather than the entire right or claim. The phrase "pro tanto" is Latin for "to that extent" or "for so much," indicating that the transfer is limited to a specific part or amount. The original holder retains the remaining part of the right or interest.

Here are some examples:

• Medical Bill Assignment: Imagine a patient who has incurred significant medical expenses and is awaiting a large insurance payout. To ensure their doctor is paid promptly, the patient might execute an assignment pro tanto, directing the insurance company to pay a specific amount—say, $10,000—directly to the doctor from the total claim. The patient retains the right to receive the remaining balance of the insurance payout.

  • How it illustrates the term: This is a partial transfer of the patient's right to receive the insurance funds. Only a specific portion ($10,000) is assigned to the doctor, while the patient keeps the right to the rest.

• Contractor Payment to Subcontractor: A general contractor is owed $100,000 by a client for completing a construction project. The general contractor, in turn, owes a subcontractor $30,000 for their work on the same project. To streamline payment, the general contractor might make an assignment pro tanto, instructing the client to pay $30,000 directly to the subcontractor. The general contractor will then receive the remaining $70,000 from the client.

  • How it illustrates the term: Here, a specific portion ($30,000) of the general contractor's right to receive payment from the client is transferred to the subcontractor, not the entire $100,000.

• Royalty Income for Debt Repayment: An author has a contract that generates ongoing royalty payments from their published books. If the author needs to repay a loan, they might enter into an assignment pro tanto with their creditor. They could assign the right to receive the first $25,000 of their future royalty income directly to the creditor. Once that amount is paid, the assignment ends, and all subsequent royalty payments revert to the author.

  • How it illustrates the term: This example shows a transfer of a specific, limited amount of future income (the first $25,000 in royalties), rather than assigning all future royalty rights indefinitely.