An assignment of claims agreement is a contract by which one party transfers to another a claim it holds against a third party. The agreement will produce legal effects between the parties and with respect to the debtor if the general conditions for the conclusion of any contract are met, and provided that the claim is not legally prohibited from being transferred, is not tied to the personality of the creditor, and is by its nature transferable.
However, even when the claim being assigned meets all of the above conditions, the agreement will not produce legal effect with respect to the debtor if the debtor and creditor have agreed that the claim may not be assigned to a third party, or at least not without the debtor’s consent.
The claim that is the subject of the assignment agreement is essentially the main right being transferred to another party. If the assigned main right is accompanied by any ancillary rights—such as a guarantee, contractual penalty, mortgage, etc.—those ancillary rights shall also be considered transferred.
The assignment of a claim produces legal effects toward the debtor, even if the debtor objects. Thus, the debtor’s consent is not necessary, but the debtor must be notified of the assignment. The practical significance of this notification lies in the fact that, from that moment on, the debtor is obligated to fulfill the claim to the assignee, not the assignor.
The assignor is obligated to deliver to the assignee all documentation proving the existence of the assigned claim and any ancillary rights, as well as a confirmation of the assignment, if the assignee requests such confirmation.
Regarding the assignor’s liability: if the assignment was made for compensation, the assignor is liable for the existence of the claim at the time of the assignment. As for the claim’s collectability, the assignor is liable only if this was explicitly agreed upon, and only up to the amount received from the assignee. A greater liability than that prescribed by law cannot be agreed upon.
Special Cases of Claim Assignment
- Assignment in lieu of performance
This refers to a relationship between creditor and debtor, in which the debtor, instead of fulfilling the obligation owed to the creditor, assigns a claim it holds against a third party. Upon the conclusion of the assignment agreement, the debtor’s obligation is extinguished up to the amount of the assigned claim.
- Assignment for collection
This is similar to assignment in lieu of performance, with the difference being that in this case, the debtor’s obligation is extinguished only when the creditor collects from the assigned claim, not when the agreement is concluded. In this situation, the debtor may fulfill its obligation either to the assignor or to the assignee, regardless of whether or not the debtor was notified of the assignment.
- Assignment as security
When the assignment is made to secure the assignee’s claim against the assignor, the assignee is obligated to exercise due care in collecting the assigned claim, acting as a diligent businessman or prudent household manager. After collection, the assignee must retain only the amount needed to satisfy their own claim against the assignor, and return the surplus to the assignor.