February 28, 2018 Section of Litigation

Non-Assignability of Contracts Without Counterparty Consent

If you value the identity of a vendor as much as you value the vendor’s products, then you need to include a non-assignment provision in your contract.

By Yvette V. Mishev

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. 

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