This document is a template assignment of a benefit of a contract.
This document should be used when the contractual rights and obligations under a contract are being transferred from one person to another and it is intended that such assignment be unconditional and immediate.
This document provides for the promise by the outgoing party to the incoming party that the contract is valid and up to date.
It is not necessary for this instrument to be a deed. However, in order for any undertakings in the instrument to be enforceable against the assignor the instrument will need to be a deed or supported by valuable consideration.
Unless the contract is novated, the benefit of a contract does not also assign the burden, even if the wording suggests it does and the original party remains liable to the other parties to the contract. If the parties intend that the benefit and burden of the contract is being transferred, use the precedent “Novation of contract”.
Notice of the assignment should be given to the promisor as soon as possible.
Consideration is not necessary in the case of a statutory assignment of the benefit of a contract or an equitable assignment of part of the benefit of a contract. If there is no consideration, the instrument will need to be a deed in order that any undertakings are to be enforceable against the assignor and (except in the case of New South Wales) the words “as beneficial owner” in clause 1 will need to be deleted and the covenants in items 2(b), (c) and (d) included.
It is important to notice that the words “as beneficial owner” in clause 1 implies covenants as to the right to assign, quiet enjoyment and further assurances in every state and territory except Queensland and the Northern Territory where there is valuable consideration and in New South Wales even where there is no consideration. See:
- section 78(1)(A) Conveyancing Act 1919 (NSW);
- section 76 Property Law Act 1958 (Vic);
- section 42 Law of Property Act 1936 (SA);
- section 45 Property Law Act 1969 (WA);
- section 3 Conveyancing Act 1951 (ACT); and
- section 7(1)(a) Conveyancing and Law of Property Act 1884 (Tas).
There are express covenants set out in clauses 2(f) to 2(h).
This precedent should be used in association with the precedent “Notice of assignment”.
This document has been authored for LexisNexis by K I N Rose BA, BCom, LLB (Hons) (Sydney) Barrister-At-Law and updated by Megan Sweetlove, Sweetlove Family Law.