Assignor vs. Assignee: Differences and Definition

Article Summary:

Assignor and assignee are terms typically used to define roles in contract assignments. The assignor is the original party to the contract. They have the ability to assign the rights and benefits of said contract to a third party, otherwise known as an assignee. Typically, these are most used when considering wills and estate planning, as well as power of attorney.

One of the most traumatic events people may experience in life is someone close to them dying. Unfortunately, often one of the most complex issues to work through is what happens with the assets of the deceased. They are no longer there in person to define where and to whom their possessions should go. In most cases, people will reference a will left by the recently deceased, which designates an assignor and an assignee.

Assignee and assignor are terms used when one party is transferring the rights and benefits of a property or contract to another individual. An assignor is the original owner of a property or contract, while the assignee is a third party to whom they transfer the rights of the contract or property. Both terms are frequently used when dealing with different situations and financial structures, such as wills and trusts. They are also commonly used in the transfer of real estate or intellectual property.

When are assignors and assignees used?

You’ll likely hear assignor and assignee within an assignment. “Assignment” is a term for a legal structure in contract law, in which an individual or entity (assignor) transfers certain property rights, benefits, and obligations to another individual or entity.

For instance, if a person is deceased or cannot physically be in a location, an assignment may delineate contractual rights with a will or a power of attorney.

The assignor

An assignor is the original owner or beneficiary of a contract, property, or real estate. They are the ones who can transfer their rights and obligations to a third party. The assignor may give the full benefits and obligations to a third party, or they may only give a certain portion of the benefits of the contract or obligations. Other times the assignor may have stipulations that must be met before they agree to transfer the rights.

The assignor must first prove their ownership or right to benefit from the contract. They then decide the scope of the limitations or restrictions for the assignee.

The assignee

An assignee is an individual or third-party entity that receives the rights, benefits, and obligations of a contract or property from an assignor. An assignee is not considered party to the contract and is registered as a third party.

Typically, the assignor will draw up a contract that grants specific rights and benefits to the other entity: the assignee.

Examples of assignees and assignors

You’ll likely see assignors and assignees pop up in several contracts and legal situations. Here are some of the most common examples of where you might see assignors and assignees.

Estates and wills

During the duration of one’s life, a person might draft a will with instructions on how to distribute their estate after they die. The person that writes the will, in this case, is the assignor. The assignor decides how their estate will be split up and their possessions allocated.

Typically, they will create a contract assignment to assign rights to distribute these assets or property to an assignee. The assignee in this case is the executor of the will. If your grandfather dies and your uncle is the executor of the will, your grandfather was the assignor and your uncle is the assignee.

Life insurance

Life insurance is another common way in which assets are transferred using an assignor and assignee. A person will take a life insurance policy out on themselves and in case of their death and name a person or persons as beneficiaries. They do this to financially protect their loved ones should they pass first.

The assignor in this case is the original party of the life insurance policy. Once the assignor passes, the assignees are the people that receive the monetary benefits of the life insurance policy.

Loans and mortgages

Most people take out a mortgage when they purchase a property if they don’t have the entire purchase price available in cash. If the buyer contributes a down payment and the bank lends the remaining funds, the buyer has a standard mortgage that grants the bank contractual rights to the physical property.

In this case, the owner of the property is the assignor. He, however, has a contract transferring ownership rights to the bank (the assignee), should he fail to make his mortgage payments.

Promissory notes

A promissory note, sometimes referred to as a debt instrument, is a document that outlines a promise from one party to repay another. When used in loan agreements, a promissory note may assign ownership of intellectual property, real property, or a contract should the borrower fail to repay the promissory note.

For instance, the bank has a contract that assigns them the rights of ownership to the property. They are the beneficiary of those contract rights should the assignor not meet their obligations. They can then assign those rights to someone else.

In this case, the bank becomes the assignor and the other party the assignee. When you hear about banks selling bundles of mortgages, like during the 2008 financial crisis, this is what they are referring to.

Power of attorney

Power of attorney is a legal term used to define the action of an assignee performing obligations for the assignor.

For instance, you buy a condo in Ho Chi Minh City in Vietnam. Vietnamese law states that nonresidents must physically be present to sign the sales and purchase contract on Vietnamese soil. If you are not able to travel to Vietnam to sign said contract,  you will need to have someone fulfill this obligation on your behalf. You would then assign “power of attorney” to someone else. They can then sign the contract in person on your behalf, and all of the contractual obligations and benefits of the contract will stay the same.

Scope and special considerations

It’s important to note that the assignor can limit the scope of the benefits, property, or obligations granted to the assignee.

For instance, let’s say Jen has a house and owns all of the rights on the land underneath it. These rights could include both the mineral rights and water rights. She might only grant the property and the land underneath to one assignee and the mineral and water rights set aside for another assignee. This is especially relevant if you have property that is sitting on natural gas reserves. Ideally, you would want to keep the mineral rights underneath the property as well.

Furthermore, the assignee might need to fulfill contractual duties and obligations to receive benefits from the contract. If the assignee fails to meet these stipulations, they might not be granted the entire benefits assigned to them by the original party.


Is the assignor the buyer or seller?

In most cases, the assignor would be the buyer. However, remember that there are several instances in which assignment occurs where there is no buyer or seller.

Who is called an assignee?

An assignee is the third party that receives the benefits and obligations of a contract, or property from another person or entity, also called the assignee.

Can an assignee sue the assignor?

Yes, if there is a dispute about the terms and scope of the contract, the assignee has the right to sue the assignor.

What is an assignor in legal terms?

An assignor is the original beneficiary of a contract or property that assigns some or all of these rights to a third party.

Key takeaways

  • Assignor and assignee are terms used for the legal transfer of rights, benefits, and obligations between two parties.
  • The assignor is the original beneficiary of a contract or property. The assignee is the third party that is receiving the benefits, rights, and obligations of a contract or property.
  • An assignment is used in several types of common legal transactions such as wills and trusts, loans, and life insurance.
  • On some occasions, the assignor will limit the scope of the rights, benefits, and obligations.
View Article Sources
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  2. Discharge Due to Death — Federal Student Aid
  3. If There’s No Will, Who’s the Executor? —
  4. How To Negotiate A Debt Settlement – Pros and Cons — SuperMoney
  5. Power Of Attorney After Death — SuperMoney
  6. How Does a Reverse Mortgage Work When You Die? — SuperMoney
  7. What Should You Do if You Can’t Afford a Funeral? — SuperMoney
  8. Contingent Beneficiary vs. Primary Beneficiary: Definitions and Examples — SuperMoney
  9. Life Insurance Facts Companies Don’t Want You to Know — SuperMoney