An assignable contract is a derivative contract that has a provision allowing the holder to give away the obligations and rights of the contract to another party or person before the contract's expiration date.
An assignable contract is a derivative contract that has a provision allowing the holder to give away the obligations and rights of the contract to another party or person before the contract's expiration date.Tags: Sat Essay StrategiesSmarty Assign ValueRequest For Medical Records Cover Letter UkWhat Is The Correct For Writing A Cover LetterE-Business PlanBuy Open University EssaysWriting A Business Plan UkScientific Research EssaysMartin Luther And 95 ThesisLiterature Review On Unemployment
An investor looking to buy the futures contract might offer an amount higher than the current market price in an illiquid environment.
As a result, the current contract holder can assign the contract and realize a profit, and both parties benefit.
The bank may sell the mortgage loan to a third party.
The borrower would receive notice from the new bank or mortgage company servicing the debt with information on payment submission.
However, the assignee must also fulfill any obligations or requirements of the contract.
Most often, assignable contracts are found in futures contracts.
The terms of the loan, such as interest rate and duration, will remain the same for the borrower.
However, the new bank would receive all of the interest and principal payments.
The exchange, or its clearing agent, would handle the clearing and payment functions.
In other words, the futures contract can be closed before its expiration.