Loan Assignment Agreement

Loan Assignment Agreement-41
An assignment may not transfer a duty, burden or detriment without the express agreement of the assignee.The right or benefit being assigned may be a gift (such as a waiver) or it may be paid for with a contractual consideration such as money.In other cases, the contract may be a negotiable instrument in which the person receiving the instrument may become a holder in due course, which is similar to an assignee except that issues, such as lack of performance, by the assignor may not be a valid defense for the obligor.

is a legal term used in the context of the law of contract and of property.

In both instances, assignment is the process whereby a person, the assignor, transfers rights or benefits to another, the assignee.

However, it is possible to assign the lease, but the new party (assignee) will be subject to the lessor’s credit evaluation process and approval.

Even if the assignee is approved, the existing lessee’s (assignor’s) personal guarantee(s), if any, might not be released unless the assignee’s credit stature is extremely strong.

Two other techniques to prevent the assignment of contracts are rescission clauses or clauses creating a condition subsequent.

The former would give the other party to the contract the power to rescind the contract if an assignment is made; the latter would rescind the contract automatically in such circumstances.For example, the assignment of a legal malpractice claim is void since an assignee would be a stranger to the attorney-client relationship, who was owed no duty by the attorney and would imperil the sanctity of the highly confidential and fiduciary relationship existing between attorney and client.Torts are not assignable as public policy, and various statutes may prohibit assignment in certain instances.The effect of a valid assignment is to extinguish privity (in other words, contractual relationship, including right to sue) between the assignor and the third-party obligor and create privity between the obligor and the assignee.Unless the contractual agreement states otherwise, the assignee typically does not receive more rights than the assignor, and the assignor may remain liable to the original counterparty for the performance of the contract.Instead, it merely gives the other party the ability to sue for breach of contract if such an assignment is made.However, an assignment of a contract containing such a clause will be ineffective if the assignee knows of the non-assignment clause, or if the non-assignment clause specifies that "all assignments are void".For assignment to be effective, it must occur in the present.No specific language is required to make such an assignment, but the assignor must make some clear statement of intent to assign clearly identified contractual rights to the assignee.The rights may be vested or contingent, Mortgages and loans are relatively straightforward and amenable to assignment.An assignor may assign rights, such as a mortgage note issued by a third party borrower, and this would require the latter to make repayments to the assignee.

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