An assumption agreement refers to an arrangement wherein a debt or an obligation is assumed by another party aside from the original debtor or obligor. It is considered as a legal and binding contract. You should also take note that it is not just the liability which is assumed by the other party, but also the rights and interests of the original obligor.
At first glance, an assumption agreement may seem complicated to deal with. However, templates and sample contracts will show you that it is easy as long as you have the necessary documents and information. To further help you, we have sample assumption agreements that you may download.
Mortgage Assumption Agreement
Loan Assumption Agreement
Account Assumption Agreement
Assumption Agreement for Lease
What Is an Assumption Agreement?
As defined by US legal dictionary, an assumption agreement refers to an undertaking of a mortgage, loan, or any other obligation primarily subjected to another person. Like any other contractual stipulation such as a shareholder agreement or an interconnection agreement, consent and consideration must be evident in the making and execution of the contract.
Kinds of Assumption Contract Templates
There are various agreement templates that you may refer to in writing a contract. Generally contracts follow similar formatting styles. The differences lie on the nature of the contract which will require unique or peculiar headings and details. Here are some samples that you may use in writing an assumption contract.
- Mortgage Assumption Contract Template – There are several reasons why mortgages may be assumed. What is material is that there is mutual understanding between the contracting parties. You may use this template if you’re planning to assume a mortgage provided that the mortgage holder agrees to the said assumption.
- Loan Assumption Contract Template – If you’re planning to assume a loan from a debtor, you have to seek first the consent of the lender. If he or she consents to it, then you may use this form to outline the stipulations and terms of the assumption agreement.
Business Assumption Agreement
Contract Assumption Agreement
Essential Components of an Assumption Agreement
The terms of an assumption agreement may vary depending on the agreement of the parties. However, here are key components that you may include in your agreement. We’ve also provided additional tips and hints to help you further.
- Introduction – This is where is the document is labelled as an assumption contract. Never leave an amount of mystery in writing your contract in order to avoid misleading provisions. Furthermore, this part also identifies the parties to the agreement that are the assignee and the assignor.
- Recitals – It is here that the parties right to the agreement is exemplified and emphasized.
- Assignment and Assumption provisions – For the both sections, the assignee and assignor must express their consent and desire to be bound by the contract with respect to the assignment and assumption.
- Inconsistency provision – This provision stipulates that if ever there are provisions of the original agreement that runs afoul with the assumption agreement, the provisions of the latter agreement will prevail.
- Indemnification provision – This provision entail that assignor must make good the payments before the effectivity of this agreement. In the end, this agreement works hand in hand with payment agreement templates.