As a professional, I have come across various legal phrases and clauses that may seem confusing or unclear to those without a legal background. One of the most common phrases found in legal agreements is “this agreement shall not be assigned by either party hereto.” In this article, I will explain the meaning and significance of this phrase and how it may impact your business dealings.
Firstly, let`s break down the sentence. “This agreement” refers to the contract or agreement being made between two parties. “Shall not be assigned” means that neither party can transfer or assign their part in the agreement to a third party, without the written consent of the other party. “By either party hereto” means that either party involved in the agreement is prohibited from assigning their rights or obligations to another party.
Now, let`s discuss why such a clause is included in legal agreements. This clause protects both parties involved in the agreement. For the party that is providing a service or product, it ensures that the other party cannot transfer the agreement to a competitor or any other party that may have different terms or conditions. On the other hand, for the party that is receiving the service or product, it ensures that they are dealing with the same party they initially made the agreement with, and there is no confusion or miscommunication.
However, it`s important to note that in some situations, an assignment clause may be necessary. For instance, if one party is going through a merger or acquisition, they may need to assign their contractual obligations to the new entity. In such cases, it`s crucial to get the written consent of the other party before making any assignments.
Furthermore, it’s essential to make sure that the language of the “this agreement shall not be assigned by either party hereto” clause is explicit and clear. Any ambiguity or uncertainty in the language can lead to disputes down the line. Therefore, it`s advisable to consult a legal expert or a professional to ensure that the language of the clause is precise and suitable for your agreement.
In conclusion, the “this agreement shall not be assigned by either party hereto” clause is a common inclusion in legal agreements to protect both parties from any confusion or miscommunication that may arise from the assignment of rights or obligations to a third party. However, it`s crucial to ensure that the language of the clause is clear and explicit to avoid any ambiguity or uncertainty. Seek the advice of a legal expert or a professional to ensure that the language is suitable for your agreement.