In this final article of the ‘Commercial Contracts‘ series, Gentia Niesert, attorney at contract law, discusses the ins and out of ‘the assignment agreement’. How does it differ from the building contract and the employment contract, and what provisions do you find in an assignment agreement?
The assignment agreement
A assignment agreement is an agreement between a client and a contractor in which the parties agree that the contractor will perform work commissioned by the client. Assignment agreements are found, for example, in the following industries: consulting, coaching, IT, marketing, events industry, healthcare, creative, legal and financial services.
The difference with the building contract
In a previous article, we discussed what the difference is between the building contract and the assignment agreement. The difference is primarily in the “material”. In a building contract a work of a material nature is created, whereas in a assignment agreement, work of a non-material nature is performed.
The difference with the employment contract
An assignment agreement also involves a different type of agreement than the employment contract. The most distinctive difference is that an employment relationship involves a relationship of authority between employer and employee, while in a assignment agreement this relationship does not exist.
Provisions in contracts of assignment
What provisions one includes in the assignment contract depends, of course, on the intentions of the parties. Listed below are a number of topics that one may encounter in assignment agreements:
- Description of the assignment
It is important that the engagement agreement provide a clear description of the work/services to be performed and what the objective is. - Obligations of the contractor and the client
It is also advisable to state in the assignment agreement the obligations of the contractor, such as what the client may expect with regard to the quality of the work, within what time period the work must be performed, in what manner the contractor must report to the client and whether the contractor must observe confidentiality.
Employer obligations may include providing certain information and all necessary cooperation. Payment terms may also be agreed upon.
- Duration and termination
It is wise to include in the agreement the duration for which the agreement is entered into, whether and how the parties can terminate the agreement (prematurely) and in which cases the agreement can be dissolved. - Liability
It may also be advisable to include in the assignment contract something about which party is liable if damage occurs during the performance of the assignment, whether certain items of damage are excluded, and whether or not the amount of compensation is capped (e.g., up to the amount paid out by the insurance company). - Intellectual property rights
Finally, the assignment agreement may include a provision on intellectual property rights. It can be agreed which party is the owner of the intellectual property rights and whether or not the intellectual property rights are transferable.
Advice on an assignment agreement
Would you like to have a contract of assignment drafted or reviewed? Then Gentia Niesert, attorney at contract law, will be happy to help you.
