The Assignment Of Subcontract Agreement is a critical legal instrument used when a subcontractor needs to transfer their contractual rights and obligations to another party. This situation commonly arises in Canadian construction and infrastructure projects due to various circumstances such as business restructuring, capacity issues, or strategic realignment. The document, governed by Canadian federal and provincial laws, must carefully address the transfer of both rights and obligations, ensure proper consents are obtained, and maintain the integrity of the original contract's terms. It requires careful consideration of provincial construction lien legislation, security requirements, and specific project needs. The agreement typically includes detailed provisions for payment arrangements, warranties, and ongoing liabilities, making it essential for complex projects where subcontractor changes must be managed without disrupting project execution.
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1. Parties: Identifies the original contractor, original subcontractor (assignor), and new subcontractor (assignee)
2. Background: Outlines the existing subcontract, the reason for assignment, and confirms the parties' intention to effect the assignment
3. Definitions: Defines key terms used throughout the agreement, including 'Original Subcontract', 'Assignment Date', and 'Project'
4. Assignment: Core clause that effects the transfer of rights and obligations from the assignor to the assignee
5. Consent of Original Contractor: Documents the original contractor's agreement to the assignment
6. Effective Date: Specifies when the assignment takes effect
7. Assignor's Warranties: Warranties regarding the subcontract status, absence of defaults, and authority to assign
8. Assignee's Covenants: New subcontractor's commitments to perform the subcontract obligations
9. Release of Assignor: Terms regarding the original subcontractor's release from future obligations
10. Payment Provisions: Handling of payments, including outstanding amounts and future payments
11. Governing Law: Specifies the jurisdiction governing the agreement
12. Execution: Signature blocks and execution requirements
1. Transitional Provisions: Used when there needs to be a handover period between the original and new subcontractor
2. Retained Liabilities: Include when the assignor retains certain liabilities or obligations
3. Security Arrangements: Required when there are bonds, guarantees, or other security arrangements to be transferred or replaced
4. Intellectual Property: Include when the subcontract involves significant IP rights that need specific handling
5. Employee Matters: Used when employees are being transferred as part of the assignment
6. Insurance Provisions: Include when specific insurance arrangements need to be addressed
7. Dispute Resolution: Optional detailed dispute resolution procedures beyond standard court jurisdiction
8. Confidentiality: Include when there are specific confidentiality requirements beyond standard business practice
1. Original Subcontract: Copy of the subcontract being assigned
2. Project Details: Detailed description of the project and work scope
3. Outstanding Payments Schedule: List of any pending payments or financial obligations
4. Required Consents: Copies of all required third-party consents
5. Transferred Assets: Inventory of any physical assets being transferred
6. Performance Securities: Details of bonds, guarantees, or other security arrangements
7. Contact Information: Key contact details for all parties post-assignment
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