Restrictions on the assignment of rights in construction contracts
Published by a LexisNexis Construction expert
Practice notesRestrictions on the assignment of rights in construction contracts
Published by a LexisNexis Construction expert
Practice notesAn assignment is the transfer of a right or an interest vested in one party (assignor) to another party (assignee), eg the transfer of the employer’s rights under a construction contract to the purchaser of the completed works. For the purposes of this Practice Note, the other party to the contract where the rights are being assigned is referred to as 'obligor'.
For further information on 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. See also Practice Note: Legal and equitable assignment in construction contracts for guidance on the different ways parties can give effect to an assignment in construction projects (either legally or in equity) and the requirements for each.
Where a construction document, such as a building contract, collateral warranty or consultant appointment, is silent on the subject of assignment, then generally the rights under the contract can be freely and unilaterally assigned by an assignor to a third
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