Assignment Clause
What it means
An assignment clause controls whether a party can transfer the contract — its rights, its obligations, or both — to somebody else. The common default is that neither party may assign without the other's written consent, frequently with a note that consent will not be unreasonably withheld.
The qualifiers do the work. "Not to be unreasonably withheld" gives you something to argue with; without it, consent can be refused for any reason at all. Many clauses also carve out assignment to an affiliate or to a successor in a merger, allowing corporate reorganisation without a consent round.
Read it in both directions. If your supplier can assign the contract freely, you may find yourself receiving service from a company you never evaluated — potentially a competitor, or a firm with different practices entirely. If you cannot assign, then selling your business becomes harder, because contracts your buyer needs cannot travel with it without permission from each counterparty.
There is a distinction worth knowing between assigning rights and delegating duties. A party can often assign the right to receive payment more freely than it can hand off the obligation to perform. Some clauses treat these separately, and where the contract is silent, the default rules differ by jurisdiction.
This clause and change of control are frequently read together, since an acquisition can trigger both. A contract that permits assignment to a successor but grants a termination right on change of control has effectively answered the same question twice, in opposite directions.
Why it matters for your business
Assignment restrictions surface at exactly two moments: when you sell your business, and when your supplier sells theirs. Both are moments when discovering the clause for the first time is expensive.
See it in action
ContractClerk identifies whether assignment requires consent, whether that consent can be withheld at will, and whether the restriction applies to both parties.
Related terms
- Change of Control — These clauses are invisible until a transaction is underway, and then they are urgent.
- Governing Law — This clause sets the cost floor for enforcing anything else in the contract.
- Severability — Severability quietly determines whether an overbroad restriction against you disappears or merely shrinks.
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Review your contract free →This is general information about how assignment clause clauses usually work. It is not legal advice, and how a clause applies depends on the rest of the document and on where you are. For a high-stakes agreement, talk to an attorney.