CandleFocus Glossary Editor
Assignments are everywhere and play a pivotal role in the modern economy. They are a transfer of rights or property from one party to another, frequently in exchange for something of value. Assignments are typically contractual in nature and can take on many forms.
Options Assignments
In the world of investing, assignments occur when option buyers exercise their rights to a position in a security. For example, an investor with a call option has the right to purchase a security at a specific price before the option expires. When they exercise that right and purchase the underlying asset, they are said to have been assigned an option.
Assignments of Wages
A wage assignment is similar to an option assignment but often applies to workers who are provided the option to assign part or all of their wages to a third party. This is often done to make a payment to a creditor, often a debt collector, or to a government agency such as the Internal Revenue Service for payment of taxes. Wage assignments can also be used for repayment of student loans, spousal or child support payments, and other non-debt obligations.
Assignments of Mortgages
When a homeowner takes out a mortgage to purchase a home, they are agreeing to assign the title to the property to the lender in an assignment of a mortgage. This is an agreement to transfer the title in exchange for the security of having their loan paid back over the duration of the loan. The assignment of the mortgage gives the lender the right to foreclose if the homeowner defaults on their payments.
Assignments of Leases
Like mortgage assignments, lease assignments are a transfer of property rights from one party to another. The owner of a rented property would make a lease assignment to transfer the right to use the property to a tenant. This assignment typically also gives the tenant the right to use the property for a predetermined period of time, often drawn up in the form of a written agreement.
In addition to the examples noted above, assignments can also be found in other types of contracts. For instance, assignments can be found in the transfer of ownership of intellectual property such as copyrights, trademarks, and patents. Assignments are also often seen in franchising agreements, where the franchisor assigns the obligation of supplying the franchisee with a variety of services, products, and locations.
Overall, assignments provide a way for people to transfer rights or property from one party to another. Whether it is in exchange for money, services, or a specific agreement, assignments are a useful tool when it comes to managing the complexities of the modern buying and selling process.
Options Assignments
In the world of investing, assignments occur when option buyers exercise their rights to a position in a security. For example, an investor with a call option has the right to purchase a security at a specific price before the option expires. When they exercise that right and purchase the underlying asset, they are said to have been assigned an option.
Assignments of Wages
A wage assignment is similar to an option assignment but often applies to workers who are provided the option to assign part or all of their wages to a third party. This is often done to make a payment to a creditor, often a debt collector, or to a government agency such as the Internal Revenue Service for payment of taxes. Wage assignments can also be used for repayment of student loans, spousal or child support payments, and other non-debt obligations.
Assignments of Mortgages
When a homeowner takes out a mortgage to purchase a home, they are agreeing to assign the title to the property to the lender in an assignment of a mortgage. This is an agreement to transfer the title in exchange for the security of having their loan paid back over the duration of the loan. The assignment of the mortgage gives the lender the right to foreclose if the homeowner defaults on their payments.
Assignments of Leases
Like mortgage assignments, lease assignments are a transfer of property rights from one party to another. The owner of a rented property would make a lease assignment to transfer the right to use the property to a tenant. This assignment typically also gives the tenant the right to use the property for a predetermined period of time, often drawn up in the form of a written agreement.
In addition to the examples noted above, assignments can also be found in other types of contracts. For instance, assignments can be found in the transfer of ownership of intellectual property such as copyrights, trademarks, and patents. Assignments are also often seen in franchising agreements, where the franchisor assigns the obligation of supplying the franchisee with a variety of services, products, and locations.
Overall, assignments provide a way for people to transfer rights or property from one party to another. Whether it is in exchange for money, services, or a specific agreement, assignments are a useful tool when it comes to managing the complexities of the modern buying and selling process.