Temporary transfers: Overview, definition, and example
What are temporary transfers?
Temporary transfers refer to the short-term transfer of rights, assets, or employees from one party to another under agreed-upon conditions. Unlike permanent transfers, temporary transfers have a defined period, after which the asset, personnel, or rights revert to the original owner or employer. These transfers can apply to employment arrangements, intellectual property, financial assets, or leased equipment.
For example, a company may temporarily transfer an employee to another department for a six-month project before they return to their original role.
Why are temporary transfers important?
Temporary transfers allow businesses and individuals to share resources, optimize workforce allocation, and provide flexibility without permanently relinquishing control or ownership. These arrangements are useful in secondment agreements, short-term leasing, and temporary intellectual property licensing.
For employers, temporary transfers can provide workforce flexibility and skill-sharing between departments or business units. In financial markets, temporary transfers of securities—such as in stock lending—allow investors to maximize returns without selling assets.
Understanding temporary transfers through an example
Imagine a multinational company temporarily transfers a software engineer from its U.S. office to its European branch for a one-year assignment. The employee remains on the U.S. payroll but works under the management of the European office before returning to their original position.
In another example, a publishing company temporarily transfers the rights to distribute a book to a foreign publisher for five years. After this period, the rights automatically return to the original publisher, allowing them to renegotiate terms or publish the book themselves.
Example of a temporary transfer clause
Here’s how a temporary transfer clause might appear in a contract:
"The Parties agree that the transfer of [Asset/Employee/Rights] under this Agreement is temporary and shall remain in effect until [End Date]. Upon expiration of the transfer period, all rights, responsibilities, and control shall revert to the original Party unless otherwise agreed in writing."
Conclusion
Temporary transfers provide a flexible way to allocate resources, transfer rights, or assign personnel without a permanent commitment. Whether used in employment, intellectual property, or financial transactions, clearly defining the terms of a temporary transfer ensures a smooth and legally sound arrangement.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.