An assignment and actors on Ecex.Exchange Trading Platform
What is a ‘Creditor’ and How Creditors Make Money
A creditor is an entity (person or institution) that extends credit by giving another entity permission to borrow money intended to be repaid in the future. A business who provides supplies or services to a company or an individual and does not demand payment immediately is also considered a creditor, based on the fact that the client owes the business money for services already rendered.
Creditors can be classified as either personal or real. People who loan money to friends or family are personal creditors. Real creditors such as banks or finance companies have legal contracts with the borrower, sometimes granting the lender the right to claim any of the debtor’s real assets (e.g. real estate or cars) if he fails to pay back the loan.
Simply, creditors make money by charging interest on the loans they offer their clients. For example, if a creditor lends a borrower $5,000 with a 5% interest rate, the lender makes money due to the interest on the loan. In turn, the creditor accepts a degree of risk that the borrower may not repay the loan. To mitigate risk, most creditors index their interest rates or fees to the borrower’s creditworthiness and past credit history. Thus, being a responsible borrower could save you a substantial sum, particularly if you are taking out a large loan, like a mortgage. Interest rates for mortgages vary based on a myriad of factors, including the size of the down payment and the lender itself; however, one’s creditworthiness has a primary impact one one’s interest rate.
Long story short creditor is the owner of rights and these rights are on a form of written contract. This written contract is the object of the next contract – assignment.
A contract assignment means that a party to the contract assigns the entire contract to another party. This means that the party gives the obligations and benefits of an existing contract to another party. This situation occurs when a party to a contract wants another party to completely step in and fulfill the contract.
The ability to assign a contract to another party is a fairly common practice in contracts law. This type of assignment is common in a wide variety of different contract situations.
Assignment of Rights
There is also a second type of assignment. Sometimes, an assignor will only make an assignment of rights. This means that the original party remains obligated to fulfill the contract, but another party receives the contractual benefits.
Assignor and Assignee
An assignor can be an individual, a group, or a business.
The assignor is the party that transfers its contractual rights to another party. In a contract assignment, this means that the party transfers both the contractual obligations and the contractual benefits. In an assignment of rights, this means that the party transfers just the benefit of the contract.
The assignee is the party that receives the rights and obligations under the contract, but wasn’t an original party to the contract. Usually, an assignee receives the contract rights and obligations directly from an original party to the contract.
Obligor and Obligee
An obligor is a party that is obligated to do something under the terms of a contract.
You will sometimes hear the term ‘obligor’ used to describe a ‘borrower’ or a ‘debtor.’ This is common because many contracts are debt contracts, but it’s important to note that obligors can be required to do something other than repay debt. Obligors can be obligated to perform a particular task or even to refrain from a particular activity.
Whenever we have an assignment and an obligor, we’ll have an obligee.
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