What are the two types of assignment in contract law?

In contract law, the two types of assignment recognized are statutory and equitable. Statutory assignment is defined and governed by specific statutes, such as the Law of Property Act 1925, which provides clear guidelines on how assignments should be executed to be legally effective. This type often requires certain formalities, including the notice of assignment being given to the debtor.

Equitable assignment, on the other hand, is based on principles of fairness and justice. It does not require adherence to the strict formalities of statutory assignment and can occur even if the required conditions for a statutory assignment are not met. An equitable assignment allows the assignor (the party assigning the rights) to transfer their rights without needing to give notice to the debtor, although the debtor is generally not obliged to recognize the assignment until notice is received.

Both types serve the purpose of enabling the transfer of rights under a contract, but they operate under different frameworks and rules. Understanding these distinctions is vital for anyone studying contract law, as they highlight how the legal system accommodates various means of assigning contractual rights.