Private Law Theory

ABSTRACT
It is a generally accepted feature of English law, and of the law of those jurisdictions that follow the English common law tradition, that the benefits of a contract may be ‘assigned’ to a third-party assignee without undermining the privity relationship between the original contracting parties. However, the precise nature of this operation has remained controversial. In this article, I suggest that what is typically termed an ‘assignment’ of contractual rights in common law jurisdictions is best understood to rest upon a contract by which a assignor undertakes to provide the assignee with the benefits due under another contractual transaction at some future point in time. The apparent ‘assignment’ that occurs between assignor and assignee then proceeds from the way in which equity’s intervention allows for the specific enforcement of a contract to assign rights. Rather than simply ordering the promisor to perform the contract to assign rights, the object of that contract means that equitable relief will take a somewhat unusual form. It requires that third parties with notice of the contract to assign rights, including the original promisor, treat the assignee as the party to whom performance of original contract is properly owed.

Sérafin, Stéphane, The Contractual Basis of the Assignment of Contractual Rights (February 29, 2024).