What Is a Non-Assignment Provision and Why Do You Need It?
Generally speaking, contracts can be freely assigned to third parties. Non-assignment provisions are designed so that contracts cannot be as freely assigned to third parties; or at least, not without first obtaining the contracting counterparty’s consent. The purpose of a non-assignment provision is to ensure that the identities of the original two contracting parties remain the same throughout the term of the contract. A basic non-assignment provision reads something like the following:
- “This contract cannot be assigned to anyone without the written consent of both parties.”
A non-assignment provision is highly recommended if the service or product contracted for is unique to the party being contracted with and/or if the identity of the service or product provider is valued as much as the service or product being provided.