Agreement Rights and Obligations: No Assignment or Transfer without Consent

Explanation

Here is a plain English explanation of the suggested Assignment clause:

This clause limits each party's ability to assign or transfer their rights and obligations under the contract to another party.

It states that neither party can assign or transfer any part of the contract to someone else without first getting written consent from the other party. The other party is expected to provide consent as long as it is reasonable to do so in the circumstances.

If Party A wanted to assign their rights to Party C, they would need to get written permission from Party B first. Party B could not unreasonably refuse permission.

The purpose is to protect both parties by requiring consent before allowing assignment. This ensures the existing parties have control over who assumes their counterparty's contract rights and obligations.

In simple terms, this clause prevents either party from transferring the contract to someone else without the other party's written permission, which cannot be unreasonably withheld.

History of the clause (for the geeks)

The historical origins of assignment clauses in contracts can be traced back to early English common law restrictions on transferring rights and obligations without the counterparty's consent.

In early English law, covenants between parties were treated as personal and could not be assigned to third parties without permission.

This reflected the importance placed on the identity and personal responsibility of parties in a contract. Allowing free assignment of contractual rights or duties without consent was seen as undermining the agreed exchange between specific parties.

Under the English Judicature Act in the late 19th century, these common law assignment principles were formally codified to require the counterparty's consent for a valid assignment. This created a default that assignments were invalid without express permission.

In the 20th century, legal systems like in the United States followed this English common law approach. Contract clauses restricting assignment became commonly included in commercial contracts to lock in the original parties unless both agreed otherwise.

As business transactions accelerated globally, tight restrictions on assignment were seen as creating problems for efficient transfers of rights and capital. Laws slowly evolved to balance freer assignment with counterparty protections.

Today, while restrictions on assignment are still used, they are carefully drafted to give counterparties a voice without being unreasonably obstructionist.

The suggested clause reflects this modern approach, giving each party control without allowing arbitrary refusal of consent.