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Assumption Agreement Template for United States

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Key Requirements PROMPT example:

Assumption Agreement

"I need an Assumption Agreement to transfer all obligations under our existing manufacturing contract from ABC Manufacturing Inc. to our new subsidiary XYZ Production Co., with an effective date of March 1, 2025, ensuring the original supplier's consent is included."

Document background
An Assumption Agreement is commonly used when one party wishes to transfer its contractual obligations to another party while keeping the original contract intact. This document is particularly relevant in situations involving business acquisitions, property transfers, or debt restructuring. The agreement must comply with U.S. federal and state laws, including the Uniform Commercial Code where applicable. It typically includes detailed information about the original agreement, the parties involved, the specific obligations being assumed, and any conditions or limitations on the assumption. The document may require third-party consent, particularly in cases involving financial obligations or regulated industries.
Suggested Sections

1. Parties: Identification of all parties involved: original obligor, assuming party, and obligee

2. Background/Recitals: Context of the original agreement and reason for assumption

3. Definitions: Key terms used throughout the agreement including defined terms from original agreement

4. Assumption of Obligations: Core provision detailing the obligations being assumed and effective date of assumption

5. Consideration: Statement of consideration for the assumption

6. Representations and Warranties: Basic representations about authority, capacity, and validity of assumed obligations

7. Governing Law: Applicable law and jurisdiction for the agreement

8. Execution: Signature blocks and dating provisions for all parties

Optional Sections

1. Release of Original Obligor: Provisions releasing the original obligor from their obligations when intended as a novation

2. Consent of Obligee: Explicit consent provisions from the obligee to the assumption of obligations

3. Security Provisions: Additional security arrangements required from the assuming party

4. Notice Requirements: Specific requirements for providing notice to relevant parties

Suggested Schedules

1. Schedule A - Original Agreement: Copy of the original agreement being assumed

2. Schedule B - Assumed Obligations: Detailed list of specific obligations being assumed, including any payment schedules or performance requirements

3. Schedule C - Consent Documents: Copies of any required third-party consents or approvals

4. Schedule D - Security Documentation: Details of any security arrangements or collateral being provided by the assuming party

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Industries

State Contract Laws: Basic contract law principles that vary by state, including formation, consideration, and enforcement requirements

Uniform Commercial Code: Standardized business laws governing commercial transactions, particularly relevant if the underlying agreement involves the sale of goods

Statute of Frauds: Legal requirement that certain contracts must be in writing to be enforceable

Assignment Laws: State-specific laws governing the transfer of rights and obligations from one party to another, including restrictions and requirements

Notice and Consent Requirements: Legal requirements for properly notifying and obtaining consent from relevant parties in an assumption agreement

Securities Regulations: Federal and state laws governing the transfer of financial instruments and securities, if applicable

Real Estate Laws: State-specific requirements for property-related contracts and transfers, if the assumption involves real estate

Banking Regulations: Federal and state banking laws governing loan assumptions and transfers

Insurance Regulations: State-specific insurance laws and requirements if the assumption involves insurance contracts

Fair Debt Collection Practices Act: Federal law governing debt collection practices, particularly relevant if the assumption involves consumer debt

Truth in Lending Act: Federal law requiring disclosure of credit terms and costs in consumer credit transactions

Bankruptcy Code Section 365: Federal bankruptcy laws governing the assumption of executory contracts in bankruptcy proceedings

Recording Requirements: State-specific requirements for recording or filing assumption agreements with appropriate authorities

Statute of Limitations: Time limits for bringing legal actions related to the assumption agreement, varying by state

Novation Principles: Legal principles governing the substitution of one party for another in a contract, including the extinction of old obligations and creation of new ones

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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