Contents
- Opening scenario
- Two forms of assignment
- Validity conditions and limits
- Common traps
- Assignment checklist
- FAQ
- Legal bases
Opening scenario
Company A signs a 3-year component supply contract with B. After a year, A wants to "transfer" the contract to C (its subsidiary): C will deliver and collect payment. A merely emails B a notice and considers it done. B objects: "I contracted with A, not C." Who is right?
It depends on a distinction many businesses miss: assigning rights and delegating duties are different acts with different legal conditions.
Two forms of assignment
1. Assignment of rights
The obligee (e.g. payment claims, delivery rights) transfers them to a third party. Under the 2015 Civil Code:
- No obligor consent needed;
- But the assignor must notify the obligor in writing;
- The obligor then pays/performs to the assignee.
2. Delegation of duties
The obligor transfers performance duties to a third party:
- Obligee consent required — the new performer directly affects their interests (capacity, reputation, quality);
- A tripartite written instrument is advisable.
3. Assigning the entire contract
In practice, "transferring the contract to C" usually means both: C collects (rights) and delivers (duties). Then:
- Duties part: B's consent required;
- Rights part: written notice to B;
- Best practice: a tripartite (A–B–C) assignment agreement.
Back to the scenario: A could assign only the payment right to C by notice; the delivery duty needs B's consent. A's one-way email is not enough for C to replace A in delivery.
Validity conditions and limits
- Anti-assignment clauses: if the original contract prohibits assignment, breach may void the assignment and trigger damages. Always re-read the original first.
- Personal obligations: duties of a personal nature (specific expert services, intuitu personae contracts) cannot be freely transferred.
- Form: use writing in all cases — though only rights-assignment notice is statutorily required in writing, writing is the only evidence in disputes.
Common traps
- Confusing "notice" with "consent": emailing and assuming the other side accepted duty delegation.
- Assigning despite prohibition: skipping the anti-assignment clause in the original.
- Forgetting notice: assigning rights without written notice → the obligor's payment to the original party remains valid.
- No tripartite agreement: only an A–C deal, B unsigned → B refuses to deal with C.
Assignment checklist
- [ ] Re-read the original: any anti-assignment/restriction clause?
- [ ] Identify: rights, duties, or both?
- [ ] Duties → obtain the other party's written consent.
- [ ] Rights → written notice to the obligor.
- [ ] Best: sign a tripartite assignment agreement.
- [ ] Archive: assignment instrument, consent, notice and receipt confirmation.
FAQ
1. What forms does assignment take? Assignment of rights and delegation of duties — different conditions.
2. Does assigning rights need the obligor's consent? In principle no, but written notice is required (2015 Civil Code).
3. Does delegating duties need the obligee's consent? Yes — the new performer directly affects their interests.
4. Contract prohibits assignment? Breach may void the assignment and trigger damages.
5. Assigning an entire contract? Both combined: other party's consent (duties) + notice (rights); tripartite assignment agreement best.
Legal bases
- Civil Code 91/2015/QH13: Art. 365 — assignment of rights (written notice; no obligor consent); Art. 370 — delegation of duties (obligee consent required); Art. 371 — delegation of secured duties.
Need advice on contract assignment?
Assigning a commercial contract requires correctly distinguishing assignment of rights from delegation of duties, and fully handling anti-assignment clauses, written form, and security interests. FLAT Law Firm advises businesses on drafting, reviewing, and negotiating contract-assignment transactions — call our hotline 0988424851 for advice on your specific case.
