Assignment
A Ltd contracts with B Ltd to sell land to B Ltd for
£100,000.
B Ltd pays a deposit to A Ltd of £10,000.
B Ltd then assigns the benefit of his contract with A Ltd to
C Ltd for £20,000.
The obligation to pay A Ltd the outstanding amount of
£90,000 has now been assumed by C Ltd.
On completion, A Ltd transfers the land directly to C Ltd and
C Ltd pays £90,000. B Ltd has made a profit of £10,000.
Sub-sale
A Ltd contracts with B Ltd to sell land to B Ltd for
£100,000.
B Ltd pays a deposit to A Ltd of £10,000.
B Ltd then enters into a sub-sale contract with C Ltd to sell
the land to C Ltd for £110,000.
Unlike in the example of an assignment given above, C Ltd has
not assumed any contractual commitment to A Ltd.
On completion, A Ltd transfers the land at the direction of B
to C Ltd.
C Ltd pays B Ltd £110,000.
B Ltd pays A Ltd the outstanding amount of £90,000.
B Ltd has made a profit of £10,000.
