| name | collateral-assignment-of-contracts |
| title | Collateral Assignment of Contracts |
| description | Drafts a Collateral Assignment of Contracts assigning a borrower's contractual rights as security for debt under UCC Article 9. Triggers when securing lender interests in contract rights, drafting pre-closing security documents, or structuring collateral packages for U.S. commercial credit facilities. |
| author | CaseMark |
| author_url | https://github.com/CaseMark/skills/tree/main/skills/legal/collateral-assignment-of-contracts |
| license | Apache-2.0 |
| version | 0.1.0 |
| execution_mode | open |
| jurisdiction | us |
| practice | finance |
| language | en |
| tags | ["agreement","drafting","transactional"] |
Collateral Assignment of Contracts
UCC Article 9-compliant security instrument assigning a borrower's contractual rights to a lender as collateral for a debt obligation.
Prerequisites
Gather before drafting:
- Loan/credit agreement — principal, date, parties, default provisions
- Assigned contracts — name, date, counterparties, subject matter, ID numbers, payment terms
- Party details — legal names, jurisdiction of organization, principal place of business (Assignor and Assignee)
- Consent posture — whether counterparty consent is required or obtained
- Governing law — typically Assignee's jurisdiction or UCC Article 9 choice-of-law location
- Filing intent — separate UCC-1 filing or authorization language in the instrument
Document Sections
1. Parties
- Assignor (Borrower/debtor) — legal name, state of org, principal office
- Assignee (Lender/secured party) — same; note capacity as secured party
- Obligors (Contract counterparties) — include if notice/consent is relevant
2. Recitals
- Identify underlying debt with specificity (date, principal, parties)
- Identify each assigned contract (date, parties, subject matter, contract number)
- State assignment is as security, not absolute transfer
3. Assignment Clause
Grant Assignee a security interest in Assignor's right, title, and interest in:
- Each identified contract
- All payment rights, proceeds, and benefits thereunder
- All proceeds (insurance, condemnation awards, substitute collateral)
Address explicitly:
- Present vs. future rights — affects perfection under UCC § 9-204 [VERIFY state enactment]
- Pre-default enforcement — whether Assignee may collect before default or rights reserved to Assignor
- Proceeds direction — ordinary-course collection by Assignor vs. lockbox/direct remittance
4. Representations and Warranties
- Authority — full right and power to grant security interest
- Ownership — sole owner; free of liens except as disclosed
- Contract validity — assigned contracts valid, binding, enforceable
