Assignor: What it Means, How it Works, Example

What Is an Assignor?

An assignor is a person, company, or other entity who transfers rights that they hold to another entity. The assignor transfers to the assignee. For example, a party (the assignor) that enters into a contract to sell a piece of property can assign the proceeds or benefits of the contract to a third party (the assignee) such as a charity or a trust.

Understanding Assignors

Each type of assignment can carry a different set of regulations with certain assignments, such as intellectual property rights, having special conditions that must be met. An assignor may be the grantor of an assignment, a liability, or appoint somebody to act in the stead of another person or entity.

For example, an executor of an estate may be appointed through a will left by a decedent. Power of attorney may be assigned to a person to tend to certain affairs for a person while they are out of the country or not capable of taking action for themselves.

An assignor will often be an individual who bestows rights to execute their will upon their death. The assignee would be an executor or other agent given the rights to see to the handling of the decedent’s estate.

Such rights might otherwise pass to a surviving spouse or an eligible heir. The assignor might choose a trusted associate or relative to be responsible for disposing of their property and repaying creditors with their assets.

The rights the assignor grants with such an assignment can still be superseded by certain legal action. For example, if an assignor included instructions for the assignee to give a valuable antique to a family member, they might not be able to fulfill that instruction. The property might have a lien attached by creditors who are pursuing all available assets to resolve debts that were left outstanding by the assignor.

Special Considerations

An assignor can include an individual or entity who grants power of attorney to an agent to act on their behalf. This type of assignment can carry very specific terms and limits that are outlined by the assignor.

For example, an assigner might grant power of attorney of property to an assignee to take control of specific assets. This might be done if the assignor is not available because of extended overseas travel or they are incapacitated by illness.

The rights they assign to the agent would allow that person to take action such as completing a sale or other transaction. The assignor who grants power of attorney of property can tailor the rights assigned to the agent to be for a specific set of assets and a defined period of time.

The assignment of power of attorney can grant broad rights or be limited in scope by the terms set by the assignor. The rights could be for the specific handling of a contract or business deal that the assignor cannot be present for.

The assignee typically will only hold the rights of power of attorney for a specified time or particular circumstances. Once the time has expired or the circumstances have been resolved, the assignee would automatically relinquish those rights. It is possible that the terms of power of attorney might allow an assignee to act in his or her own self-interest rather than for the interests of the assignor.

It is possible that an assignor grants power of attorney without restrictions. This would give the assignee complete decision-making control over the assignor's assets and business holdings without oversight from any other entity. Such rights would allow the assignee to make broad and lasting decisions regarding the assignor’s affairs.

Assignor vs. Assignee

In contrast with an assignor, an assignee is the person or entity that receives property or rights under the terms of a contract. For example, suppose that a man grants a power of attorney to his wife. In that circumstance, the man acts as the assignor, and the wife will be the assignee, receiving the right to make legal decisions on her husband's behalf.

Example of Assignor

The term assignor frequently appears in lending, where ownership rights may be assigned as a form of collateral. When taking out an auto loan, the borrower allows the financing company to place a lien on their vehicle, effectively granting the company partial ownership rights if the borrower fails to repay the loan. In this case, the borrower acts as the assignor of their ownership rights, and the lender acts as the assignee.

The Bottom Line

Assignor and assignee are common terms in contract law, reflecting the exchange of property or rights. Whenever you buy a house or a car, it is important to understand the role of the assignor and assignee in these transactions.