Legal and equitable assignment in construction contracts
Legal and equitable assignment in construction contracts

The following Construction guidance note provides comprehensive and up to date legal information covering:

  • Legal and equitable assignment in construction contracts
  • What is an assignment
  • Legal assignment
  • Equitable assignment
  • The importance of serving notices
  • Consent
  • Legal and equitable assignments compared
  • Adjudication

What is an assignment

An assignment is the transfer of a right or an interest vested in one party (the assignor) to another party (the assignee), for example, the transfer of the employer’s rights under a building contract to the purchaser of the completed works. In this Practice Note, the other party performing the obligations under the contract is referred to as the 'obligor'. The effect of a valid assignment is to entitle the assignee to demand performance of a contractual obligation, for example, an entitlement to ask for defects to be corrected and/or a right to bring proceedings.

This Practice Note considers the different ways in which parties can give effect to an assignment in construction documents (eg construction contracts, appointments and collateral warranties), and their implications. For further information on:

  1. what an assignment is, why it arises in a construction context, how it operates and what steps are needed to put in place effective assignments, see Practice Note: Assignment in construction contracts

  2. circumstances in which the assignment of rights may be restricted, prohibited or only permitted when there is express contractual provision to do so, see Practice Note: Restrictions on the assignment of rights in construction contracts

Where parties choose to assign rights under a construction document, the assignment may be effected either by way of legal assignment or