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Assumption Agreement for Malaysia

Assumption Agreement Template for Malaysia

A legal document governed by Malaysian law that facilitates the transfer of rights and obligations from one party (the original obligor) to another party (the assuming party), with the consent of the beneficiary (original obligee). The agreement details the scope of obligations being assumed, any conditions precedent, the effective date of the assumption, and may include provisions for the release of the original obligor. It operates under the Malaysian Contracts Act 1950 and related legislation, ensuring proper transfer of contractual obligations while maintaining legal certainty and protecting the interests of all parties involved.

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What is a Assumption Agreement?

An Assumption Agreement is a crucial legal instrument used in Malaysian business and commercial transactions when one party needs to take over the contractual obligations of another. This document type is commonly utilized in corporate restructurings, business acquisitions, project reassignments, or debt refinancing scenarios. The agreement must comply with Malaysian contract law, particularly the Contracts Act 1950 and related statutes, and typically requires proper stamping under the Stamp Act 1949 to be admissible in Malaysian courts. It serves to document the transfer of obligations, secure necessary consents, and establish the rights and responsibilities of all parties involved, while potentially providing for the release of the original obligor from their obligations. The agreement's structure and content are designed to ensure clarity in the assumption process and minimize potential disputes regarding the transferred obligations.

What sections should be included in a Assumption Agreement?

1. Parties: Identifies all parties to the agreement: the original contracting parties (assignor/original obligor and original obligee) and the assuming party (assignee)

2. Background: Recitals explaining the original agreement, the intent to transfer obligations, and the purpose of the assumption

3. Definitions: Defines key terms used throughout the agreement, including references to the original agreement, assumed obligations, and effective date

4. Assumption of Obligations: Core provision describing the obligations being assumed and the terms of assumption

5. Effective Date: Specifies when the assumption becomes effective

6. Representations and Warranties: Standard representations from all parties regarding their capacity and authority to enter into the agreement

7. Consent and Acknowledgment: Original obligee's consent to the assumption and acknowledgment of the assuming party as new obligor

8. Governing Law and Jurisdiction: Specifies Malaysian law as governing law and determines jurisdiction for disputes

9. Notices: Details how formal notices should be given between parties

10. Entire Agreement: Standard boilerplate confirming this document represents the entire agreement regarding the assumption

What sections are optional to include in a Assumption Agreement?

1. Conditions Precedent: Used when the assumption is conditional upon certain events or actions occurring first

2. Original Obligor Release: Include when the original obligor is to be released from all obligations

3. Continuing Obligations: Used when the original obligor retains certain obligations or liabilities

4. Security Arrangements: Required when existing security needs to be transferred or new security provided

5. Indemnification: Include when specific indemnities are required between parties

6. Transition Provisions: Used when there needs to be a transition period or specific transition requirements

7. Cost Allocation: Include when there are significant costs associated with the assumption that need to be allocated between parties

What schedules should be included in a Assumption Agreement?

1. Schedule 1 - Original Agreement: Copy or summary of the original agreement being assumed

2. Schedule 2 - Assumed Obligations: Detailed list of specific obligations being assumed

3. Schedule 3 - Retained Obligations: List of obligations retained by the original obligor (if any)

4. Schedule 4 - Required Consents: List of third-party consents required for the assumption

5. Schedule 5 - Transition Plan: Detailed procedures and timeline for implementing the assumption

6. Appendix A - Form of Notice: Template for notifying relevant parties of the assumption

7. Appendix B - Supporting Documents: Copies of relevant corporate authorizations and supporting documents

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Malaysia

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
























Clauses

























Relevant Industries

Banking and Financial Services

Real Estate

Manufacturing

Construction

Energy

Telecommunications

Retail

Healthcare

Technology

Transportation and Logistics

Professional Services

Relevant Teams

Legal

Finance

Compliance

Risk Management

Corporate Secretarial

Operations

Business Development

Project Management

Corporate Strategy

Treasury

Relevant Roles

Legal Counsel

Contract Manager

Corporate Secretary

Chief Legal Officer

Chief Financial Officer

Risk Manager

Compliance Officer

Business Development Manager

Project Manager

Operations Director

Transaction Manager

Corporate Restructuring Officer

Industries





Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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