| Status | |
|---|---|
| Source |
Commonwealth Contract Terms clause C.C.9 |
| Additional information |
This clause is included to allow the Supplier to propose, and the Customer to either accept or decline, an assignment of the Supplier’s rights under the Contract.
The clause does not allow the Supplier to propose assignment of its Contract obligations.
In this clause, assignment refers to the situation where the Supplier wishes to transfer some or all of its rights under the Contract to a third party that is not currently a party to the Contract. There may be risks to the Customer if the Supplier is permitted to assign some or all of its rights to a third party that has not been through the scrutiny of a procurement process.
The clause permits the Customer to either accept or decline the Supplier’s proposal. It provides details of how the Supplier can make a valid proposal for assignment of its rights under the Contract, and how the Customer can validly accept or decline the Supplier’s proposal.
The clause also provides a mechanism for the Supplier to assume consent where the Customer does not decline consent within 28 days.
Assignment
X.1 The Supplier may not assign any of its obligations under the Contract. The Supplier may not assign any rights under the Contract without the Customer’s prior written consent. To seek consent, the Supplier must provide the Customer with a Notice, that includes full details of the proposed assignee and the rights the Supplier proposes to assign.
X.2 To decline consent, the Customer must provide a Notice to the Supplier, setting out its reasons, within twenty-eight (28) calendar days or such other time as agreed between the Parties, of receiving the Notice seeking consent. Otherwise, the Customer is taken to have consented.
While use of this clause is optional, it is common for contracts to include a clause of this type.
Standardisation of contractual text results in efficiencies for both Parties to a contract. Before deciding whether a particular clause is appropriate, procurement officials should carefully consider the context of their procurement. Capitalised terms (unless otherwise defined) are based on the definitions in the CCS Glossary. Definitions of any relevant defined terms may need to be added.
Clause wording would need to be changed where the Customer wishes to permit the Supplier to also request to assign its obligations under the contract to a third party.
Clause wording may also need to be changed to substitute a different time period in the second paragraph or impose conditions on approving the Supplier’s request to assign, for example to vet the proposed assignee.
Otherwise, where this clause is included, the clause wording should be used without change.
Terms that are capitalised may need to be changed to align with the Contract terminology.
