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.
The assignee would be entitled to take delivery of the underlying asset and receive all of the benefits of that contract before its expiry.
Aside from the name on the check, there should be little difference noticed by the borrower.
Let's say an investor entered into a futures contract that contains an assignable clause in June to speculate on the price of crude oil, hoping the price will rise by year-end.
However, unwinding or selling the contract outright is the cleaner solution, and it also guarantees that all liabilities concerning the contract's obligations are discharged.
However, holders of futures contracts don't need to assign the contract to another investor when they can unwind or close the position through a futures exchange.Most futures contracts do not have an assignment provision.If you are interested in buying or selling a contract, make sure to carefully check its terms and conditions to see if it is assignable or not.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.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.The holder would incur any gains or loss depending on the difference between the purchase and sale prices.An assignment agreement can allow a bank or a mortgage company to sell or assign an outstanding mortgage loan.Futures are standardized contracts with fixed prices, amounts, and expiration dates.Investors can use futures to speculate on the price of an asset such as crude oil.