Introduction to this document


Letter assigning a contract

It’s perfectly possible to assign a contract by using a letter.  But it’s important to realise that you’re still bound by the original contract.  All you’re doing is assigning the benefits under the contract to the third party.  Most notably they are the concepts of novation and assignment along with the Contract (Rights of Third Parties) Act 1999.

What is meant by novation?

Novation effectively means to replace or to substitute. Accordingly novation in contract law is a mechanism whereby one party transfers all of their obligations and benefits under a contract to a third party.


What is meant by assignment?

A contractual assignment is whereby a right or obligation under a contract of one person is transferred to another person. The parties to the contract do not change meaning that privity of contract still exists between the original parties.


Is consent required to assign the benefit?

All that is required for an assignment of the benefit of the contract is an agreement between the original contracting party and the third party. It is possible to assign the burden of a contract, i.e. the obligations of that party to the contract, to a third party. However, in this scenario consent of all three parties is required.