Two transfers in one document
An assignment hands over the benefits of a contract, such as the right to be paid or to receive services, while an assumption is the new party's promise to take on the obligations that come with it. An assignment and assumption agreement usually does both at once, which is why it appears so often in asset purchases and lease transfers. What it frequently does not do is take the original party off the hook. In many situations the party that assigned the contract remains answerable to the counterparty if the new party fails to perform, unless the counterparty agrees to a release, which is often documented as a novation or a consent that says so in plain terms. People who sold a business years earlier are sometimes surprised to learn they are still on a lease or a supply contract for exactly this reason.
Reading the underlying contract first
The assignment document cannot override the contract being assigned. Many commercial agreements limit transfer, require the other side's written consent, or treat a change of ownership as a transfer, and the wording of those clauses varies more than people expect. Before anything is signed, collect the contracts that will move, mark which ones need consent or notice, and note who must sign on each side. Confirm the exact legal names of the entities involved, since a transfer to the wrong affiliate can create problems later. Keep the signed consents with the agreement itself, because years later they are the pages people look for and cannot find.
What we settle before you sign
We look at whether the counterparties have actually consented, whether a release of the assigning party is available and worth asking for, and how obligations that arose before the transfer date are divided. Liabilities for past performance, unpaid amounts, and pending claims are common points of disagreement, and the agreement should say clearly who carries them. If you are the assigning party, we discuss whether an indemnity from the new party is realistic and whether it is backed by anything. If you are taking on the contract, we look at what you are inheriting and whether the counterparty has already raised complaints you would be stepping into.
