Assignment

An assignment (Latin cessio) is a term used with similar meanings in the law of contracts and in the law of real estate. In both instances, it encompasses the transfer of rights held by one party—the assignor—to another party—the assignee.[1] The details of the assignment determines some additional rights and liabilities (or duties).

* Typically a third-party is involved in a contract with the assignor, and the contract is in effect transferred to the assignee. For example, a borrower borrows money from a local bank. The local bank receives a mortgage note and can thereafter transfer that note to a financial institution in exchange for a lump-sum of cash, thereby assigning the right to receive payment from the borrower to another entity. Mortgages and lending contracts are relatively amenable to assignment since the lendor's duties are relatively limited; other contracts which involve personal duties such as legal counsel may not be assignable. |

Liabilities

Unless the contractual agreement states otherwise, the assignee typically does not receive greater rights than the assignor, and the assignor may remain liable to the original counterparty for the performance of the contract. The assignor often delegates duties in addition to rights to the assignee.

However, in the United States there are various laws which limit the liability of the assignee, often in order to facilitate credit, since assignees are typically lenders.[2] Notable examples include a provision in the Truth in Lending Act[3] and provisions in the Consumer Leasing Act and the Home Ownership Equity Protection Act.[2]