A Deed of Assignment is a legal instrument used to transfer rights, title, or interests from one party (the assignor) to another (the assignee). In Nigeria, deeds of assignment are widely used across commercial and personal transactions—transfer of receivables, sale of contractual rights, assignment of intellectual property, and transfer of leasehold interests, to name a few.

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What is a Deed of Assignment?

A deed of assignment is a written document in which one person (the assignor) voluntarily transfers and assigns to another person (the assignee) legal rights, title, or beneficial interest in an asset or right. The subject matter may include:

• Choses in action (rights to sue, claims for debt, contractual receivables)

• Intellectual property (trademarks, copyrights, patents)

• Leasehold interests (assigning a commercial lease)

• Debts and mortgages (assignment of loan facilities or security)

• Business goodwill or specific commercial rights

A deed is more solemn than a simple agreement. It is typically executed as a deed when the parties want the transfer to take effect as a binding and often immediately enforceable conveyance, and where the law or the parties’ commercial objectives require a formal written and witnessed instrument.

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Why You Need a Deed of Assignment

There are several compelling reasons to use a deed of assignment rather than relying on informal transfer methods or implicit understandings:

1. Clarity and Certainty of Title

A well-drafted deed sets out exactly what rights are being transferred, when the transfer takes effect, and any reservations or limitations. This prevents disputes over scope and timing of the transfer.

2. Evidence for Third Parties

Banks, creditors, and counterparties require clear documentary proof of assignment. A deed provides reliable evidence that the assignor transferred the rights to the assignee.

3. Enforceability

Deeds are formal instruments and may have stricter evidential weight in court. For certain types of rights (for example, land interests or some intellectual property), writing and formal execution are prerequisites for enforceability.

4. Notice and Priority

For choses in action and receivables, giving notice of assignment to the debtor is vital. A deed evidencing assignment helps establish priority among competing claimants and reduces the risk that the debtor pays the wrong party.

5. Tax, Stamp Duty and Regulatory Requirements

In Nigeria, some transfers attract stamp duty or registration requirements (for land, registered IP, or regulated financial assets). A formal deed makes it easier to comply with these obligations.

6. Customised Commercial Terms

A deed allows parties to include warranties, indemnities, representations about the right being assigned, and transitional arrangements (e.g., how collections will be handled post-assignment).

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Types of Assignment: Legal and Equitable (Briefly)

Before drafting, understand the difference between a legal assignment and an equitable assignment, just as there is a difference between deed of assignment and a deed of conveyance:

• Legal assignment: Transfer effected in accordance with statutory and contractual formalities that gives the assignee full legal rights against third parties—usually requires writing, signed by the assignor, and notice to the debtor where applicable.

• Equitable assignment: May arise where formalities are incomplete but there is clear intention to assign; gives the assignee equitable rights that a court can enforce but may be weaker against bona fide third parties.

For commercial safety, aim for a legal assignment documented by a deed and accompanied by proper notice and registration (where required).

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Preliminary Steps Before Drafting

1. Identify the Subject Matter: Be precise—what right, receivable, or asset is being assigned? Include invoice numbers, contract references, IP registration numbers, description of the leased premises, etc.

2. Check Governing Documents: Some contracts or registrations include anti-assignment clauses, consent requirements, or formalities. Get required consents in writing before proceeding.

3. Tax & Regulatory Review: Determine whether stamp duty, registration, or regulatory filings are required (e.g., Land Registry, Trademarks Registry, CBN filings for financial transfers).

4. Collect Documentation: Bring copies of the original contract, evidencing documents, proof of ownership, and any prior notices or correspondence.

5. Decide Effective Date & Consideration: Will the assignment be immediate on signing, or deferred? Is it a sale for value or a gratuitous transfer? Consideration affects tax and enforceability.

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Step-by-Step Guide to Drafting a Deed of Assignment

Below is a practical structure and suggested wording elements you can adapt. Drafting should be done by or reviewed with legal counsel for complex or high-value transfers. Here is how you draft a deed of assignment:

1. Title and Date

Begin with a clear title and the date of execution.

Example:

DEED OF ASSIGNMENT
Made this 15th day of March 2025

2. Parties (Recitals)

Identify the assignor and the assignee in full (names, business type, registration numbers, addresses).

Example:

BETWEEN:
(1) ABC LIMITED, a company incorporated under the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria, with RC No. 123456, and having its registered office at [address] (the “Assignor”); and
(2) XYZ VENTURES LIMITED, a company incorporated under the Companies and Allied Matters Act, RC No. 654321, with registered office at [address] (the “Assignee”).

3. Background / Recitals (Whereas clauses)

State the context: the original contract or right, the reason for assignment, and any requisite consents obtained.

Example:

WHEREAS the Assignor is beneficially entitled to the receivables described in Schedule 1 (the “Assigned Rights”); and
WHEREAS the Assignor has agreed to assign the Assigned Rights to the Assignee on the terms set out in this Deed.

Recitals help courts understand intent but are not operative clauses.

4. Operative Clause (The Assignment)

Clearly and unambiguously transfer the rights.

Example:

1. Assignment
The Assignor hereby assigns absolutely to the Assignee all its rights, title and interest in and to the Assigned Rights with effect from the Effective Date.

Be specific: include identifiers (invoice numbers, contract clauses, IP registration numbers).

5. Consideration

State the consideration (payment, set-off, or nominal sum) or specify that the assignment is by way of gift if applicable.

Example:

2. Consideration
In consideration of the sum of One Million Naira (₦1,000,000) paid by the Assignee to the Assignor (receipt of which the Assignor hereby acknowledges), the Assignor assigns the Assigned Rights as set out in Clause 1.

6. Warranties and Representations

Short, proportionate warranties reduce future disputes. Common warranties cover authority, ownership, and absence of encumbrances.

Example:

3. Warranties
The Assignor warrants that:
a) it is the legal and beneficial owner of the Assigned Rights;
b) the Assigned Rights are free from any lien, encumbrance or charge; and
c) it has full authority to assign the Assigned Rights.

Limit warranties to what you can support with evidence.

7. Covenants and Undertakings

Set out obligations such as cooperation, provision of documents, notice to debtors, and transitional arrangements.

Example:

4. Undertakings
The Assignor shall, at the Assignee’s cost, execute and deliver all further documents and perform all acts necessary to perfect the assignment, and the Assignor shall not at any time do anything which will or may prejudice the Assigned Rights.

8. Notice to Debtors / Third Parties

Where appropriate, include an indemnity or a clause obliging the assignor to notify the debtor, or oblige the assignee to do so.

Example:

5. Notice
The Parties agree that the Assignee shall give written notice of the assignment to the relevant debtors within 14 days of the Effective Date. The Assignor shall provide the Assignee with the contact details and all documentation required to give effective notice.

Note: In many jurisdictions, until notice is given, the debtor may pay the assignor and discharge liability. Prompt notice is therefore critical.

9. Consideration of Registration & Stamp Duty

Acknowledge responsibility for stamp duty and, if necessary, registration with relevant registries.

Example:

6. Stamp Duty and Registration
The Parties shall bear responsibility as follows: the Assignor shall pay all stamp duties (if any) payable in respect of this Deed. The Assignee shall bear the cost of any registration or filings necessary to perfect the assignment.

In Nigeria, certain transfers (land, certain securities) require registration at the appropriate registry—confirm with counsel and pay stamp duty where applicable.

10. Indemnity Clause

Provide remedies if pre-existing claims or undisclosed liabilities emerge.

Example:

7. Indemnity
The Assignor shall indemnify the Assignee against any losses arising from any breach of the Assignor’s warranties and any claim by third parties that the Assigned Rights are subject to prior encumbrances.

11. Governing Law and Jurisdiction

Specify that Nigerian law governs the deed and set jurisdiction (courts of Nigeria).

Example:

8. Governing Law
This Deed shall be governed by and construed in accordance with the laws of the Federal Republic of Nigeria.

12. Execution and Witnessing

A deed should be executed with formalities: signed by the assignor and assignee, and properly witnessed. If the assignor or assignee is a company, ensure execution is in accordance with the Companies and Allied Matters Act (CA: by two directors or a director and company secretary, or under common seal if still used).

Example execution blocks and witness lines should be included. If individuals sign, include name, address, and occupation of witnesses.

13. Schedules and Annexures

Attach schedules detailing the assigned items (Schedule of invoices, Schedule of IP registrations), forms of notice, and any consent letters obtained.

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Practical Clauses and Drafting Tips

• Be precise about scope: “all rights, title and interest” is broad—if you mean only future receivables or only specific invoices, say so.

• Include an Effective Date: Decide whether the assignment is effective upon signature or at a later date.

• Address collections and receipts: Specify how monies collected post-assignment will be handled and who bears collection costs.

• Maintain confidentiality: If disclosure risks customer relations, include confidentiality obligations.

• Limit retrospective warranties: Avoid unlimited representations reaching far back in time—be targeted.

• Consider retention of title: If the assignor continues to perform services tied to the assigned rights, ensure warranties cover ongoing obligations.

• Plan for disputes: Include dispute resolution—negotiation, mediation, and Nigerian courts or arbitration clause depending on preference.

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Post-Execution Steps (Practical Checklist)

1. Stamp Duty Payment: Pay stamp duty at the appropriate Federal or State Stamp Duties Office and obtain stamp certificate.

2. Notice to Debtor: Serve notice of assignment by registered post, courier, or email with delivery/read receipt; retain proof of delivery.

3. Registration (if required): File at the Land Registry, Trademarks Registry, or other agency if the subject matter requires registration to perfect the transfer.

4. Record Keeping: Keep executed originals and provide certified copies to the assignee and any relevant counterparty.

5. Public Filings / Bank Notifications: Notify banks or escrow agents if assigned receivables are secured by bank mandates.

6. Operational Handover: Transfer records, documentation, and any control data (passwords, client ledgers) needed for the assignee to exercise the rights.

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Common Pitfalls to Avoid

These are few of the pitfalls to avoid. For a more robust article on this, you can read the write-up on mistakes to avoid with property deeds.

• Failing to obtain contractual consent where the underlying contract prohibits or requires consent for assignment.

• Not giving timely notice resulting in the debtor discharging payment to the wrong party.

• Incomplete specification of assigned assets, creating ambiguity.

• Ignoring stamp duty or registration rules, which can render the deed unenforceable or expose parties to penalties.

• Overbroad warranties that expose the assignor to disproportionate liability.

• Failing to address tax consequences—assignment may have VAT, WHT, or capital gains implications depending on substance.

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Get Professional Help

A deed of assignment is not always straightforward, but LEGALDOC can draft a bespoke deed of assignment for your specific transaction, a customised document generated instantly to match the precise rights you intend to transfer.You can access the professionally drafted document here: https://legaldoc.ng/personal/deed-of-assignment-template/

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