Assignment is the transfer of a personal claim. A creditor who assigns a claim is referred to as an assignor and the acquirer as an assignee. The debtor of the claim is the assigned debtor. Although the assigned debtor is not a party to the assignment, the assignment does have consequences for him. After the assignment, the assigned debtor must pay his debt to a new creditor.
Deed of assignment
For an assignment to be legally valid, the formal requirements for a transfer must be met. A valid transfer must be concerned, by an assignor with power of disposition. The assignment must take place in writing by deed. The deed of assignment can be drawn up privately between the assignor and the assignee or in the presence of a civil-law notary. The claim to be assigned must be described in sufficient detail in the deed of assignment. If there is an agreement underlying the claim to be assigned, that agreement must be included in the deed.
Public and undisclosed assignment
A distinction is made between a public assignment and an undisclosed assignment. Where a public assignment is concerned, the assigned debtor is directly notified of the assignment. The assigned debtor then knows to whom he must pay the debt. Until the time of notification of the assignment to the assigned debtor, the latter can pay the assignor in full. Where an undisclosed assignment is concerned, no notification to the debtor is required. If the undisclosed assignment takes place by private deed, the deed of transfer must be registered with the Tax and Customs Administration.
Assignment is not possible if the assignor and the assigned debtor have explicitly excluded the transferability of the claim in the underlying agreement. If the assignor nevertheless assigns the claim, the assignment will not be valid. Sometimes the assignor turns out not to have power of disposal. In that case, the assignment is deemed never to have taken place. The claim remains with the assignor. This is only different if the assignee is acting in good faith when he notifies the assigned debtor of the assignment and the assignor’s lack of power of disposal arises from the invalidity of an earlier assignment which was not the result of the lack of power of disposal of the assignor at that time. If both conditions are met, the third-party assignee is protected and the assignment is still valid.
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Assignment is a convenient tool, which is very often used by creditors. It is clear from the above that assignment is subject to the necessary formal requirements. If these requirements are not met, this can have major consequences.
Do you have specific questions, problems or disputes regarding assignment? Contact one of the specialised lawyers of VIOTTA. If you engage a lawyer from VIOTTA, you are assured of expert legal assistance. Contact us, we are happy to help you.
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