Assignment is the transfer of a registered claim to another creditor. The debtor remains bound by the same obligation but must from then on pay the new creditor.
Legal basis
Article 3:94(1) of the Dutch Civil Code governs disclosed assignment: a deed plus notice to the debtor. Since 2004 paragraph 3 has provided for undisclosed assignment, for which an authentic or registered private deed suffices and no notice is required; until notice is given the debtor may still discharge the debt by paying the original creditor. Article 3:83(2) allows the transferability of a claim to be excluded by agreement; the Supreme Court held in Coface/Intergamma in 2014 that such a clause has proprietary effect if it is intended to, and that in case of doubt it is treated as having contractual effect only. Article 6:145 provides that the transfer leaves the debtor’s defences intact.
How it works in practice
Assignment is used in factoring, in the sale of receivables portfolios and in financing, where it often goes hand in hand with a pledge. In an asset deal it is the mechanism by which the debtor book transfers. In practice notice is the pivot: only afterwards must the debtor pay the new creditor, and only then can it no longer set off new counterclaims against the original creditor.
Where it goes wrong
A prohibition on assignment in the debtor’s purchasing conditions is overlooked, so that the transfer fails. A second error is a deed that describes the claims to be transferred with insufficient precision. Third, it is forgotten that the debtor retains its defences, including suspension and set-off that arose before notice.
Related terms
Assignment connects to the asset deal, to prejudgment attachment of receivables and to joint and several liability.
Would you like to transfer claims, or resist an assignment? Our civil law specialists assess the deed and the clause.
