Norzul,

Generally have to say yes, although they do have similarities.

Far too many differences too try and explain in detail but is assignment a form of sub contracting, or sub contracting a form of assignment, or neither, would be an interesting legal debate.

Norzul,

Both are used used alot in construction. Both have their place and if done correctly then there’s no problems and as you state, often good reason for doing so.

It is oftenly mistakenly thought that "we’ve assigned you this part of the contract and therefore it is ALL your responsibility". Unfortunately later a defect or similar appears and the original party finds out that they are under an obligation with regards the defect and still liable for damages.

Or they tried to assign the obligations as well only to find out later when there’s a problem, that you can drive a coach and horses through the agreement.

Like everything else, each have there place and if used correctly, both can be very useful.

All,

Assignment and Novation are two different things.

Assignment is when you "assign" a right or rights to another party. ie, I have this right(s)and I’m going to give it to another party so that they may get the benefit of it. You can not assign a greater right than you have yourself and it must not be dependant on the person. eg A lets B walk across his land. B could not assign that right to C if B’s right is personal only to him, ie A agrees B can do it, but would object to C, D, E, etc walking across his land. Therefore, assignment in the contractual sense is the assignment of ones parties rights under the contract to another party - usually agreement of all parties is required. However and most importantly, the obligations of the party assigning the right under the contract is not assigned unless agreed. ie the party receiving the right can do whatever that right allows, but will be free from the obligations arising from it - eg time of completion.

IT IS NOT TO BE CONFUSED WITH NOVATION, which is similar but crucially different.

Novation is the substituting one party to a contract with a new party. New conditions can be negotiated by the parties before the novation takes place and the novation forms a new contract. Most importantly, it is not just rights that are assigned but also the original parties obligations.

eg A + B are in contract and the parties agree that B should be replaced by C. C is novated to the contract which now becomes new a contract between A + C.

Often novation is used in ECP contracts where a design company has undertaken a preliminiary design work for the Employer and the Contractor wants to employ that same company to continue the design work.

E = Employer, D= Designer, C= Contractor

Original contract for design between E + D. ECP contract is let to C.

As C now is the Contractor and Designer, D is novated to C from E, to replace C as Designer, usually on very similar terms to the original contract E & D had. A new contract now exitsts between C & D but as stated above, D also takes on the obligations under the contract of C.

Assignment is often mistakenly used where Novation should be and then the original company who thought they had rid themselves of all their obligations under the contract find out they haven’t.