By Erica Pero
I’ve been dealing with Landlords a lot lately. Landlords who won’t allow the Tenant to assign the lease to another person. You see, there’s usually some sort of issue with the Assignment Clause which allows the Landlord to be picky and prevent the Tenant from transferring the lease to someone else. Assignment Clauses are in almost every contract. They lay out the terms for one party to assign (i.e., “transfer”) the rights, duties and obligations of a contract to another party. Drafted properly, they prevent or permit the transfer of the contract to someone else.
Sometimes it’s important to prohibit an assignment – like if you hired a doctor and you only want THAT DOCTOR to work for you. As the employer, it’s reasonable to say, “Doctor may NOT assign her/his rights, duties and obligations under this agreement.” This stops the dentist from swapping out another dentist in her/his place. Makes sense, right?
Sometimes it’s important to allow reasonable assignments – like if you’re a business owner with a lease, and someday you’d like to sell your practice to another doctor. As the Tenant you’d want to make sure you could assign the lease “with the Landlord’s permission, not to be unreasonably withheld.” This language means the Tenant has to ask the Landlord for permission first, but the Landlord needs to be reasonable in allowing the request.
The Assignment Clause is usually included at the end of the contract in the Miscellaneous section. In my experience, most non-lawyers (and even some lawyers!) stop reading once they get to the boiler-plate language at the end of a document. To put it bluntly, it’s important to review ALL of the words, not just the ones about money.
Look for phrases like “XYZ may NOT assign it’s rights under the terms of this agreement”, or “XYZ MAY assign it’s rights under the terms of this agreement WITH the written permission of ABC, not to be unreasonably withheld”. If you think forward to the end of the relationship when previewing the document, you can negotiate the right Assignment Clause at the outset.
Erica Pero, an attorney with Pero Law, focuses her practice on health law. She helps healthcare professionals navigate the complexities of running a business in today’s healthcare industry. Pero Law is a lean law firm committed to excellent customer service and exceptional legal representation. perolaw.com
