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Dealer Assignment Agreement

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DEALER ASSIGNMENT AGREEMENT

This Dealer Assignment Agreement (the "Agreement") is made and entered into as of Effective Date: by and between Assignor Name: with principal place of business at (hereinafter "Assignor"), and Assignee Name: with principal place of business at (hereinafter "Assignee"). Assignor and Assignee are each a "Party" and collectively the "Parties."

RECITALS

WHEREAS, Assignor is currently a dealer under certain agreements, dealer registrations, contracts, customer accounts, inventory rights, warranty arrangements and related assets described further herein (collectively, the "Assigned Dealer Interests"); and

WHEREAS, Assignee desires to acquire, and Assignor desires to assign and transfer to Assignee, all of Assignor's right, title and interest in and to the Assigned Dealer Interests, subject to the terms and conditions set forth in this Agreement; and

WHEREAS, the Parties intend by this Agreement to effect an assignment of the Assigned Dealer Interests and to provide for the assumption of specified obligations by Assignee and the release of Assignor from certain liabilities as set forth below.

NOW, THEREFORE

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. ASSIGNMENT

1.1 Assignment. Subject to the terms and conditions of this Agreement, Assignor hereby assigns, conveys, transfers and delivers to Assignee all of Assignor's right, title and interest in and to the Assigned Dealer Interests as described in Section 1.3, including but not limited to existing dealer agreements, dealer numbers, customer lists limited to dealer-related contacts, and any associated inventory rights owned by Assignor.

1.2 Excluded Assets. Notwithstanding Section 1.1, the following assets and rights are expressly excluded from this assignment: those assets identified in the exclusions box below and any assets expressly listed as excluded by Assignor in writing prior to the Effective Date.

2. CONSIDERATION

2.1 Purchase Price. In consideration for the assignment set forth in Section 1, Assignee shall pay to Assignor the sum of (the "Purchase Price") in the manner set forth below.

3. ASSUMPTION OF OBLIGATIONS

3.1 Assumption. Effective as of the Effective Date, Assignee covenants and agrees to assume and perform those obligations of Assignor that are expressly listed in Attachment A to this Agreement and any other obligations that the Parties expressly agree in writing are to be assumed by Assignee. Assignee's obligation to assume liabilities shall be limited to those specifically described obligations and shall not include unknown contingent liabilities not identified in Attachment A.

4. REPRESENTATIONS AND WARRANTIES

4.1 Assignor Representations. Assignor represents and warrants to Assignee that: (a) Assignor is the lawful owner of the Assigned Dealer Interests free and clear of any security interests, liens or encumbrances except those disclosed in writing to Assignee; (b) Assignor has full corporate authority to enter into this Agreement and effect the Transactions contemplated herein; and (c) there are no pending Actions that would prevent assignment of the Assigned Dealer Interests.

4.2 Assignee Representations. Assignee represents and warrants to Assignor that: (a) Assignee has the full power and authority to enter into this Agreement and to assume the obligations specified herein; (b) acceptance of the Assigned Dealer Interests will not violate any material agreement to which Assignee is a party; and (c) Assignee has sufficient financial capacity to satisfy the assumed obligations.

5. INDEMNIFICATION

5.1 Indemnification by Assignor. Assignor shall indemnify, defend and hold harmless Assignee from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys' fees) arising out of any breach of Assignor's representations or obligations under this Agreement or any liabilities expressly retained by Assignor.

5.2 Indemnification by Assignee. Assignee shall indemnify, defend and hold harmless Assignor from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys' fees) arising out of Assignee's failure to perform the assumed obligations or any breach of Assignee's representations under this Agreement.

6. CONDITIONS PRECEDENT

6.1 Conditions. The obligations of the Parties to effect the assignment and assumption contemplated by this Agreement are subject to the satisfaction or waiver on or before the Effective Date of the following conditions precedent: (a) receipt of any required third-party consents; (b) delivery of all documentation reasonably requested by Assignee to effect the transfer; and (c) accuracy of the representations and warranties as of the Effective Date.

7. CONFIDENTIALITY

7.1 Confidential Information. Each Party shall maintain in confidence and shall not disclose to any third party any Confidential Information received from the other Party in connection with this Agreement, except as required by law or with the prior written consent of the disclosing Party. "Confidential Information" includes business plans, pricing, customer lists and financial information furnished by one Party to the other in connection with the Transactions.

8. NOTICES

8.1 Method. All notices, demands and other communications required or permitted under this Agreement shall be in writing and shall be delivered personally, by nationally recognized overnight courier, or sent by certified mail, return receipt requested, to the addresses set forth below or to such other address as a Party may designate by written notice to the other Party.

9. AMENDMENT; WAIVER; COUNTERPARTS

9.1 Amendment. This Agreement may be amended or modified only by a written instrument executed by both Parties.

9.2 Waiver. No waiver of any breach or right under this Agreement shall be effective unless in writing signed by the waiving Party. The waiver of any breach shall not be deemed a waiver of any subsequent breach.

9.3 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart by electronic transmission shall be effective as delivery of a manually executed counterpart.

10. GOVERNING LAW; ENTIRE AGREEMENT; SEVERABILITY

10.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the jurisdiction selected by the Parties: , without regard to principles of conflicts of laws.

10.2 Entire Agreement. This Agreement, including all attachments and schedules hereto, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether written or oral, relating to such subject matter.

10.3 Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, such provision shall be severed and the remainder of this Agreement shall remain in full force and effect to the fullest extent permitted by law.

11. MISCELLANEOUS PROVISIONS

11.1 Further Assurances. Each Party shall execute and deliver such further instruments and take such further actions as may be reasonably required to effectuate the purposes and intent of this Agreement.

11.2 Relationship of Parties. Nothing in this Agreement shall be construed to create a partnership, joint venture, agency or fiduciary relationship between the Parties except as expressly set forth herein.

Assignor Printed Name:

By:

Date:

Assignee Printed Name:

By:

Date:

Enter text✕

What a Dealer Assignment Agreement Is and When It Applies

A Dealer Assignment Agreement is a legal contract used when a dealer's rights, obligations, or interests under a sales, consignment, or financing arrangement are transferred to another dealer, buyer, or assignee. Typical contexts include vehicle inventory transfer, franchise territory reassignment, or assignment of floorplan financing. The document identifies the assignor, assignee, subject assets or contracts, effective date, and any conditions or consents required from third parties such as manufacturers, lenders, or franchisors. Properly drafted assignments preserve title, payment obligations, and notice requirements between parties.

Why Use a Dealer Assignment Agreement

A clear assignment agreement reduces ambiguity about who holds title, who is liable for payments, and which contractual obligations transfer. It protects lenders, manufacturers, and customers by documenting consent, effective dates, and required approvals under existing contracts.

Why Use a Dealer Assignment Agreement

Who Typically Prepares and Signs This Agreement

Parties involved in dealer assignments include selling dealers, acquiring dealers, lenders, manufacturers, and legal counsel; each has distinct responsibilities when completing the agreement.

  • Selling dealer or assignor—dealer or corporate entity transferring rights; must provide asset and contract details and any lender consents.
  • Acquiring dealer or assignee—entity receiving rights and responsibilities; must accept obligations and provide payment or security as required.
  • Lender or secured party—often must consent where floorplan financing or liens exist; may impose conditions or require payoff.

Proper role identification up front speeds processing, avoids later disputes, and ensures the agreement binds the correct legal entities.

Authorized Signers and Typical Roles

Dealer Principal

The dealer principal or authorized corporate officer signs for the dealership entity. This signer typically warrants corporate authority, confirms asset descriptions, and agrees to any post-assignment covenants and indemnities on behalf of the dealership.

Finance Manager

The finance or accounting manager signs to acknowledge payoff figures, satisfy lender conditions, or provide account numbers for wire transfers. This signer often coordinates lien releases and verifies that financial obligations are clearly addressed.

Essential Data Elements to Include

Assignor Name: Full legal entity name
Assignee Name: Full legal entity name
Asset Description: VINs or contract IDs
Effective Date: MM/DD/YYYY
Consideration: Dollar amount or terms
Lender Consent: Yes or No

Consequences of an Incorrect or Incomplete Assignment

Title Issues: Delayed transfer of legal title
Lien Problems: Priority disputes with secured creditors
Contract Breach: Claims for unauthorized assignment
Tax Exposure: Incorrect sales or transfer reporting
Customer Confusion: Warranties or service obligations unclear
Enforceability: Risk of being void without required consents

Step-by-Step: How to Complete a Dealer Assignment Agreement

Follow these sequential steps to prepare, review, and execute an assignment to minimize processing delays and legal risk.

  • 01
    Identify Parties: Enter full legal entity names and contact info.
  • 02
    Describe Assets: List VINs, contract numbers, or inventory details.
  • 03
    Confirm Consideration: Specify payment, offsets, or assumed liabilities.
  • 04
    Obtain Consents: Get lender, manufacturer, or franchisor approvals.

How to Configure an Online Assignment Workflow

Set up an eSign workflow that matches the transaction sequence and authentication needs for all parties.

Field Configuration
Signing Order Assignor → Lender → Assignee
Authentication Email link or SMS code; use KBA for lenders
Required Fields VINs, dates, consideration, consents
Audit Trail Enable timestamping and IP logging

Where to Send or File the Executed Agreement

After execution, route copies to stakeholders and file where required to protect title and lien priority.

  • Assignor File: Keep original signed copy in corporate records.
  • Assignee File: Store executed copy with purchase invoices.
  • Lender / Secured Party: Provide copies for payoff and lien release processes.
  • DMV / Title Agency: Record transfer where state rules require it.

Delivery Methods and Digital Signing Options

Choose delivery and signer authentication methods that satisfy lenders, manufacturers, and applicable state notarization rules to maintain enforceability.

  • Email Link: Standard delivery
  • In-Person Kiosk: On-site signing
  • Remote Notary: RON where permitted

Typical Timelines and Processing Expectations

Understand common timing points so all parties can coordinate payoff, title transfer, and inventory reconciliation.

Payoff Processing Time:

Lender payoffs typically process within 3–10 business days.

Title Transfer Filing:

State DMV processing varies; allow 7–30 days.

Lien Release Delivery:

Expect lien releases 5–15 business days after payoff.

Manufacturer Consent:

Franchisor approvals can require 10–30 days.

Inventory Reconciliation:

Complete within 7 business days after assignment.

Common Mistakes to Avoid

  • Leaving asset descriptions vague (e.g., 'vehicles' without VINs) which creates ambiguity in title and lien searches and can delay DMV filings.
  • Failing to get required lender or franchisor consent, resulting in claims for breach or contested priority from secured creditors.
  • Using incomplete legal entity names or missing corporate suffixes that hinder record searches and can void notices or filings.
  • Missing notarization or witness steps where state law or contract requires them, which can render the assignment unenforceable.

Real-World Scenarios Where This Agreement Is Used

These brief examples show typical dealer assignment workflows and outcomes in common industry contexts.

Franchise Territory Transfer

A dealer sells its regional franchise rights to another dealer

  • Manufacturer consent required
  • The agreement documented territory boundaries, transition services, and a two-step escrow for payments to protect both parties through the transfer period.

Floorplan Financing Payoff

A dealer transfers inventory to a buyer while paying the floorplan lender

  • Lender lien release required
  • The assignment specified VINs, effective date, and lender payoff instructions, ensuring title could be recorded and the buyer avoided unexpected liens.

Key Clauses to Include in a Professional Dealer Assignment Agreement

Include these core clauses to allocate risk, ensure enforceability, and document administrative steps required after assignment.

Parties

Full legal names and contact details for assignor, assignee, and any consenting secured parties to avoid identity ambiguity.

Assets

Precise description of assigned assets or contracts, including VINs, serial numbers, contract numbers, or inventory lists as applicable.

Consideration

Clear payment terms, offsets for existing obligations, escrow instructions, and precise payoff figures where lenders are involved.

Consents & Liens

A lender or franchisor consent section specifying required releases, payoff timing, and conditions precedent to assignment effectiveness.

Warranties

Standard assignor warranties about title, absence of undisclosed liens, and accuracy of asset descriptions to protect assignee.

Governing Law

Choice of governing state law and dispute resolution provisions to clarify enforcement and venue for claims.

Practical Tips for Accurate and Efficient Completion

Follow these practical tips to reduce delays, avoid lender disputes, and ensure accurate public record filings.

Verify Legal Names
Confirm exact corporate names and EINs with formation documents and title records before signing.
Attach Exhibits
Include VIN lists, payoff statements, and lender consents as exhibits to prevent later disputes.
Use Clear Dates
Specify effective and transfer dates explicitly to align accounting, insurance, and title actions.
Maintain Audit Trail
Preserve signed copies, timestamps, and communications to support enforcement or audits.

Comparing eSignature Solutions for Dealer Assignment Workflows

Use this high-level comparison to evaluate common eSignature provider features and compliance that matter for assignment agreements and lender workflows.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varied trial Varied trial Varied trial Varied trial
Bulk Send Yes Yes Yes Yes Limited
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year No cap No cap No cap

Frequently Asked Questions About Dealer Assignment Agreements

Answers to common questions on execution, notarization, lender consent, and electronic signing to help avoid processing delays.


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