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Assignment

The transfer of rights and/or obligations under a Contract from one party to another, who is not a party to that Contract, is known as Assignment.

Assignment could be done for various reasons such as change in the ownership of a Client or for other reasons. Clients retain a right at their sole discretion to assign a Contract to:

  • one of its group company or
  • one Client shareholding company to another or
  • third party.

The assignment of a Contract does not alter any of the provisions of that Contract but merely transfers the rights and obligations from one party to another.

Exception/deviation

The exception/deviation often taken in this regard is Contractors right to assign the Contract to another legal entity. This deviation is normally not acceptable as the Client has contracted based on Contractors capabilities and hence cannot accept assignment. Subject to negotiations, Client could accept a deviation for Contractor having a right to assign the Contract subject to Client’s written authorization.

Exception could also be for Client assigning the Contract with Contractors consent. This is not an acceptable qualification and the Client should retain an absolute right to assign the Contract especially where it has a diverse shareholding pattern and therefore could be subject to change.

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