If you assign cash, property or other assets to another party, an assignment fee may be required to complete the transaction. The assignment fee compensates the assignor for the rights he is giving up in the agreement. The amount of the fee will vary based on the type and value of the property involved in the agreement. Before executing an assignment agreement, check any previous contracts related to the assigned property. Some contracts include a nonassignment clause that automatically invalidates the entire contract if violated.
Requirements for a Legally Binding Assignment
Assignments do not have to be in writing to be legally binding. Verbal assignment agreements also are valid, but can be more difficult to prove if there is a dispute. In the absence of a written agreement, the assignor will be held liable for any damages resulting from the assignment. Assignment agreements that are set to take place in the future are not legally binding.
Negotiating the Assignment Fee
Some states have laws limiting the amount of the assignment fee that may be charged per transaction. As long as the legal requirements are met, the parties to the assignment are free to negotiate the fee amongst themselves. Once the fee has been set, include the amount and terms of payment in the assignment agreement to prevent future disputes.