Abstract
It is not unusual for related legal terms to be confused. The concepts of “assignment” and “direction to pay” are among those that are sometimes misused. However, the law is clear with regard to the distinctions. In an assignment the assignee steps into the shoes of the assignor and may enforce in his own name the contractual right against the original obligor. And, the assignor retains no rights to enforce the contract right after it has been assigned. In contrast, a direction to pay is essentially the appointment of an agent to carry out a task. It does not confer any rights to that third party. Accordingly, this article will begin with some basic contract law principles and then define and contrast the concepts of “assignment” and “direction to pay,” including the proper use (and misuse) of these terms, hopefully resolving the confusion.