Assignment Of Debt
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Assignment of debt is an agreement that transfer debt, rights, and obligations from a creditor to a third party. Assignment of debt agreements are commonly found when a creditor issues past due debt to a debt collection agency. The original lender will be relieved of all obligations and the agency will become the new owner of the debt. Debt assignment allows creditors to improve liquidity by reducing their financial risk. If a creditor has taken on a large amount of unsecured debt, an assignment of debt agreement is a quick way to transfer some of the unsecured loans to another party.
Common Sections in Assignments Of Debt
Below is a list of common sections included in Assignments Of Debt. These sections are linked to the below sample agreement for you to explore.
Assignment Of Debt Sample
Reference : Security Exchange Commission - Edgar Database, EX-10 19 ex107.htm ASSIGNMENT OF DEBT AND SECURITY , Viewed October 25, 2021, View Source on SEC .
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28+ years experience. Licensed in Colorado and New York. Areas of expertise: estate planning, wills and trusts; trademark law; patent law; contracts and licensing; small business organization and counseling.
Angela Hayden is an accomplished and driven attorney with a diverse professional background that sets her apart. Having served as a former Assistant Public Defender in Allegheny County, Angela acquired invaluable expertise in navigating the complexities of the criminal justice system. Her trial experience spans a wide range of cases, from minor retail theft to complex criminal homicide, demonstrating her ability to deliver successful outcomes for her clients. Prior to her focus on criminal defense, Angela honed her skills in public policy and political consulting through her work with both the Pennsylvania and United States House of Representatives. This experience provided her with a deep understanding of the intricacies of public policy and the ability to offer strategic guidance to clients. Angela's career also took her to a civil defense firm, where she traveled across the country, defending clients in litigation. This experience enhanced her ability to handle complex civil matters and strengthened her litigation skills. In addition to her expertise in criminal defense and civil litigation, Angela has demonstrated her proficiency in employment law, providing guidance and consultation to small businesses and non-profit organizations. Her keen insight into employment law matters ensures that businesses operate within legal boundaries while fostering a positive work environment. Furthermore, Angela is a licensed realtor, well-versed in residential real estate transactions. This additional knowledge allows her to offer comprehensive legal support to clients involved in real estate matters, ensuring their interests are protected throughout the process. Angela holds a degree from Hampton University and obtained her Juris Doctor from the University of Dayton School of Law. She is pursuing a Master of Business Administration. She is licensed to practice law in Pennsylvania and the District of Columbia, demonstrating her commitment to providing exceptional legal services in multiple jurisdictions. With her extensive experience and passion for achieving favorable outcomes for her clients, Angela Hayden is a dedicated advocate ready to guide you through your legal journey.
Seasoned corporate, business and real estate attorney with 30 years experience managing private practice groups and in-house legal functions for publicly traded, privately held, and family companies.
I am an experienced family law attorney licensed in California and Florida with over 13 years of experience.
I have worked for over 20 years in the areas of family law, business formation, contracts and real estate law. In the area of family law, I represent clients in all areas of family law including child custody, child support, spousal support and marital property division as well as preparing prenuptial and separation agreements. I am experienced in real estate law, including commercial and residential leases, preparing various types of real estate related contracts. I am also experienced in business formation among other business law matters. I currently work in the area of grant management with the Small Business Administration.
Oliver Keene is not your typical attorney. With a personal touch and a passion for helping others, he goes above and beyond to provide exceptional legal services. Born and raised in the heart of the Appalachian coalfields, Oliver understands the value of hard work and perseverance. His small-town upbringing instilled in him a deep sense of community and a commitment to making a difference in people's lives. Oliver's journey in the legal field began with a Bachelor's degree in Criminal Justice from Bluefield University. He went on to earn his Juris Doctorate from Lincoln Memorial University - Duncan School of Law, where he excelled in his studies and developed a strong foundation in law. Throughout his career, Oliver has gained invaluable experience working as a public defender, an attorney advisor for the Small Business Administration, and in various legal roles. With a focus on estate planning and business law, Oliver is dedicated to helping individuals and families protect their assets, plan for the future, and navigate the complexities of the legal system. His approachable demeanor, attention to detail, and genuine care for his clients set him apart. Oliver's clients can trust that he will go the extra mile to ensure their legal needs are met with the utmost professionalism and personalized service. Outside of his legal practice, Oliver enjoys spending time with his wife and daughter, exploring the great outdoors, and indulging in his passion for hunting and fishing. His commitment to serving military families is evident in his offering of discounted services as a token of gratitude for their sacrifices. When you choose Oliver Keene as your attorney, you're not just hiring a legal professional - you're gaining a trusted advisor and a compassionate advocate. With Oliver by your side, you can have confidence that your legal matters will be handled with the highest level of expertise and care.
Dean represents client in all manners of tax controversy and provides comprehensive business consulting to corporations, LLCs, and non-profits. He has worked with multi-national companies, but most enjoys assisting small businesses with all legal matters from formation to dissolution. Dean routinely represents individuals and businesses before the IRS and various state taxation agencies. From audits to appeals, he works closely with his clients to reach favorable outcomes and beneficial resolutions. Though he assists many clients in his home state of California, Dean values working with a diverse clientele throughout the country.
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- By theme International mobility and portability of life insurance policies Life insurance as part of estate planning Capitalisation policies: definition & functioning Pledge, assignment of debts, assignment of rights: the guarantees on a life insurance contract The underlying assets, definitions and examples Parties to the Life Insurance Policy The protection of assets Unit-linked policies The Freedom to Provide Services The fundamentals of life insurance
- DISCOVER LIFE INSURANCE 360: THE DIGITAL WHITE PAPER ON LUXEMBOURG LIFE INSURANCE. Life Insurance 360 is a space entirely dedicated to luxembourg life insurance. Download Telecharghement Noir
- The concept
- Pledge, assignment of debts, assignment of rights: the guarantees on a life insurance contract
Assignments of debt and pledges
Life insurance and capitalisation contracts have many advantages. In particular, they enable policyholders to this type of policy to provide their creditors (for example, a bank or credit institution) with a guarantee for repayment of a debt or a loan. It is thus possible to use an assignment of debts and a pledge.
What is an assignment of debt?
An assignment of debt is defined by the Civil Code as “ a transaction by which one person (the ‘assignor’) obtains a debt from another person (the ‘assignee’) who undertakes to repay a third party (the ‘delegatee’) who accepts him as debtor ”...
Example: Mr. X's bank has granted him a loan and it wishes to obtain a guarantee for payment of the instalments due under the loan. Mr. X has also taken out a life insurance policy with his insurer. In such a case, an assignment of debt may be made in order to repay the bank (the delegatee) in the event of default in payment by Mr. X (the assignor), in accordance with the terms of the assignment of debt.
An assignment of debt may be:
- ‘ Imperfect’ when the assignor (Mr X, the borrower) is a debtor of the delegatee (the bank) but the latter has not released him from his debt, since the assignment gives the delegatee a second debtor (the insurer). The payment made by one of the two debtors releases the other, in due proportion.
- ‘ Perfect ’ when the assignor (Mr X) is a debtor of the delegatee (the bank) and the wish of the delegatee to discharge the assignor results expressly from the act, the assignment operates by novation.
The vast majority of assignments of debt are imperfect assignments of debt.
What is a pledge?
A pledge is defined as a transaction by which the policyholder offers his policy as collateral to a creditor so that the latter may be paid (in priority) the amount of the guaranteed claim (and within the limits of the provisions of the policy) out of the insurance payout, in the event that the borrower (debtor) fails to meet his obligations.
What are the common features and differences between an assignment of debt and a pledge?
These two types of collateral share several points in common :
- only the policyholder may pledge his life insurance policy or capitalisation policy;
- assignments of debt and pledges both comprise a number of components which include the reciprocal commitments of the parties, and in particular a description of the pledged or assigned creditor's claim and the specific procedures in the event of a redemption during the term of the assignment. In principle, if the policyholder does not honour his debt, the creditor has the right to demand redemption of the life insurance or capitalisation policy, up to the amount of the policyholder's debt, within the limit of the policy’s value on the day when he makes his redemption request and the terms of the deed;
- when the insured is different from the policyholder, you need to have his consent to the assignment of debt or pledge;
- the spouse’s agreement is also necessary when the policyholder is married under a community regime, and the funds invested in the life insurance or capitalisation policy are jointly owned;
- creation of the assignment of debt or the pledge is subject to the agreement of the designated beneficiary if the latter had accepted the benefit of the said policy before creation of the assignment of debt or of the pledge;
- the policyholder may no longer act freely in the management of his life insurance or capitalisation policy, such as switching or surrender transactions. Indeed, he must request prior authorisation of the secured creditor or delegatee;
- when a life insurance or capitalisation policy is taken out with a Luxembourg insurance company, a warrant for the waiver of professional confidentiality must be granted by the policyholder in order to release the insurance company from the professional confidentiality to which it is bound under Luxembourg law;
- the charge over the life insurance or capitalisation policy is lifted when the policyholder has fully repaid his debt to his creditor and this creditor has informed the insurer of this by means of a release.
However, these two types of collateral differ in several aspects and, particularly, the following:
- a life insurance or capitalisation policy may be pledged either by endorsement or by deed subject to the formalities provided for in Articles 2355 to 2366 of the Civil Code. The insurer's signature is therefore not necessarily required when the pledge is communicated to him;
- conversely, in the case of an assignment of a claim, a clear expression of intent on the part of all parties, i.e. the assignor, the delegatee and the assignee (and other parties depending on the circumstances) is essential.
Thus, an assignment of debt and a pledge have many advantages which are common to both types of collateral. The choice between these two types of collateral, and their content, depend on the intention of the parties and on the applicable laws or regulations.
Pledges on life insurance policies: a game worth betting on
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Case Study: pledging a policy and the leverage effect
Assignment of debt and pledge are two techniques that allow you to pledge your life insurance or capitalisation policy in return for a loan. How do these two solutions differ? And what do they have in common?
Assignment of Debt – What You Need to Know
By aqila zulaiqha zulkifli ~ 23 june 2023.
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Aqila Zulaiqha Zulkifli
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Occasionally, to ensure liquidity and to reduce financial risk, a creditor may assign its rights to a debt repayment to another party. Such an arrangement is known as the assignment of debt.
An assignment generally means the transfer of contractual rights and liabilities to a third party without the concurrence of the other party to the contract.  The assigning party is known as the assignor, whereas the recipient party is known as the assignee.
Once an assignment occurs, the assignee stands in the exact position as the assignor and has the legal right to a debt, other remedies therein, and even the power to discharge the debt. The debtor must then, make all payments to the assignee, and not the assignor. In fact, if the debtor pays the assignor without the consent of the assignee, the debtor may risk having to pay the assignee all over again. 
An assignment of debt is governed by Section 4(3) of the Civil Law Act 1956 (the “Act”) (cited with approval in the Federal Court case of UMW Industries Sdn Bhd v Ah Fook  , in which, the elements of a statutory assignment of debt can be summarized as follows:
- the assignment must be in writing under the hand of the assignor (and not, i.e the agent of the assignor);
- the assignment must be absolute and not by way of charge only; and
- the express notice in writing must have been given to the person liable to the assignor (i.e the debtor).
The effect of a statutory assignment is that the assignee possesses the legal right to the debt and the right to sue the debtor in respect of the debt without needing to join the assignor. 
However, rest assured, an assignment that is not in compliance with Section 4(3) of the Act is not automatically invalid. A non-statutory assignment could still be valid in equity  , though the assignee would have to join the assignor in the proceeding, either as a plaintiff or defendant  . This is to ensure a just disposal of the action, by ensuring that all relevant parties are before the Court so that the assignor would not make a claim against the debtor in respect of the same debt.
As such, in conclusion, before accepting an assignment of debt, it is prudent for an assignee to ensure that the elements in Section 4(3) of the Act abovementioned are fulfilled. If the assignment is meant to be absolute, such terms should be clearly reflected in the deed of assignment, or the assignee runs the risk of being crippled in a legal proceeding to recover the debt in the absence of the assignor.
 United General Insurance Co Sdn Bhd v Progress Credit Sdn Bhd  2 MLJ 297
 malayawata steel berhad v government of malaysia & anor  2 mlj 103,   1 mlj 365,  mbf factors sdn bhd v tay hing ju (t/a new general trading)  5 mlj 536,  khaw poh chhuan v ng gaik peng & ors  1 mlj 761 (fc),  chan min swee v melawangi sdn bhd  7 clj 1.
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Debt Assignment: How They Work, Considerations and Benefits
Daniel Liberto is a journalist with over 10 years of experience working with publications such as the Financial Times, The Independent, and Investors Chronicle.
Charlene Rhinehart is a CPA , CFE, chair of an Illinois CPA Society committee, and has a degree in accounting and finance from DePaul University.
Katrina Ávila Munichiello is an experienced editor, writer, fact-checker, and proofreader with more than fourteen years of experience working with print and online publications.
Investopedia / Ryan Oakley
What Is Debt Assignment?
The term debt assignment refers to a transfer of debt , and all the associated rights and obligations, from a creditor to a third party. The assignment is a legal transfer to the other party, who then becomes the owner of the debt. In most cases, a debt assignment is issued to a debt collector who then assumes responsibility to collect the debt.
- Debt assignment is a transfer of debt, and all the associated rights and obligations, from a creditor to a third party (often a debt collector).
- The company assigning the debt may do so to improve its liquidity and/or to reduce its risk exposure.
- The debtor must be notified when a debt is assigned so they know who to make payments to and where to send them.
- Third-party debt collectors are subject to the Fair Debt Collection Practices Act (FDCPA), a federal law overseen by the Federal Trade Commission (FTC).
How Debt Assignments Work
When a creditor lends an individual or business money, it does so with the confidence that the capital it lends out—as well as the interest payments charged for the privilege—is repaid in a timely fashion. The lender , or the extender of credit , will wait to recoup all the money owed according to the conditions and timeframe laid out in the contract.
In certain circumstances, the lender may decide it no longer wants to be responsible for servicing the loan and opt to sell the debt to a third party instead. Should that happen, a Notice of Assignment (NOA) is sent out to the debtor , the recipient of the loan, informing them that somebody else is now responsible for collecting any outstanding amount. This is referred to as a debt assignment.
The debtor must be notified when a debt is assigned to a third party so that they know who to make payments to and where to send them. If the debtor sends payments to the old creditor after the debt has been assigned, it is likely that the payments will not be accepted. This could cause the debtor to unintentionally default.
When a debtor receives such a notice, it's also generally a good idea for them to verify that the new creditor has recorded the correct total balance and monthly payment for the debt owed. In some cases, the new owner of the debt might even want to propose changes to the original terms of the loan. Should this path be pursued, the creditor is obligated to immediately notify the debtor and give them adequate time to respond.
The debtor still maintains the same legal rights and protections held with the original creditor after a debt assignment.
Third-party debt collectors are subject to the Fair Debt Collection Practices Act (FDCPA). The FDCPA, a federal law overseen by the Federal Trade Commission (FTC), restricts the means and methods by which third-party debt collectors can contact debtors, the time of day they can make contact, and the number of times they are allowed to call debtors.
If the FDCPA is violated, a debtor may be able to file suit against the debt collection company and the individual debt collector for damages and attorney fees within one year. The terms of the FDCPA are available for review on the FTC's website .
Benefits of Debt Assignment
There are several reasons why a creditor may decide to assign its debt to someone else. This option is often exercised to improve liquidity and/or to reduce risk exposure. A lender may be urgently in need of a quick injection of capital. Alternatively, it might have accumulated lots of high-risk loans and be wary that many of them could default . In cases like these, creditors may be willing to get rid of them swiftly for pennies on the dollar if it means improving their financial outlook and appeasing worried investors. At other times, the creditor may decide the debt is too old to waste its resources on collections, or selling or assigning it to a third party to pick up the collection activity. In these instances, a company would not assign their debt to a third party.
Criticism of Debt Assignment
The process of assigning debt has drawn a fair bit of criticism, especially over the past few decades. Debt buyers have been accused of engaging in all kinds of unethical practices to get paid, including issuing threats and regularly harassing debtors. In some cases, they have also been charged with chasing up debts that have already been settled.
Federal Trade Commission. " Fair Debt Collection Practices Act ." Accessed June 29, 2021.
Federal Trade Commission. " Debt Collection FAQs ." Accessed June 29, 2021.
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Debt Assignment and Assumption Agreement
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Updated June 22, 2023
A debt assignment agreement allows a person who owes money to assign the debt to someone else who assumes its obligation. This is common when a person takes possession of an asset where the seller still owes money. The buyer will purchase the asset and assume the debt.
In most loan agreements and notes, the lender will be required to approve the new debtor. This can be done with a signed waiver or statement by the lender.
Sample Debt Assignment Agreement
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ASSIGNMENT AND ASSUMPTION OF DEBT WITH RELEASE
I. THE PARTIES. This Assignment and Assumption of Debt with Release (“Agreement”) is effective and created on [ DATE ] (“Effective Date”) is by and between:
Debtor : [ DEBTOR’S NAME ], with a mailing address of [ DEBTOR’S MAILING ADDRESS ] (“Debtor”),
Assuming Party : [ ASSUMING PARTY’S NAME ], with a mailing address of [ ASSUMING PARTY’S ADDRESS ] (“Assuming Party”),
Creditor : [ CREDITOR’S NAME ], with a mailing address of [ CREDITOR’S NAME ] (“Creditor”),
The Debtor, Assuming Party, and Creditor shall each be referred to herein as a “Party” and collectively as the “Parties.”
II. ASSIGNMENT OF DEBT. It is known that the Debtor is indebted to the Creditor, under a separate agreement, for the current principal sum of $[ CURRENT DEBT AMOUNT ], plus any interest (“Debt”).
Under this Agreement, the Assuming Party agrees to assume: (choose one)
☐ – All of the Debt.
☐ – Portion of the Debt. The Assuming Party agrees to assume $[ PORTION OF DEBT AMOUNT ].
The Debt shall continue its repayment in accordance with the terms located in a separate agreement between the Debtor and Creditor.
III. CONSENT FROM CREDITOR. For this Agreement to be legally valid: (choose one)
☐ – Consent is Required from the Creditor. This Agreement is contingent upon the Creditor approving and consenting to its terms and conditions. The Creditor shall be required to grant their consent within [ # ] days of the Effective Date. If the Creditor does not consent or rejects this Agreement, it shall be considered void.
☐ – Consent is Not Required from the Creditor. This Agreement is not contingent upon the Creditor to approve its terms and conditions.
IV. ASSUMPTION OF LIABILITIES. The Assuming Party agrees to assume the Debt, which may or may not include, further legal or financial liability. If the Debtor is subject to legal or financial liability, the Assuming Party shall assume its liability, including but not limited to, attorney’s fees and damages.
V. DEBTOR’S RELEASE. This Agreement shall release the Debtor from all liabilities in relation to the Debt, the Creditor, and the Assuming Party.
VI. SEVERABILITY. If any term, covenant, condition, or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no way be affected, impaired, or invalidated.
VII. PARTIES’ REPRESENTATIONS. This Agreement can be considered void, at any time, if evidence is presented that any Party was not honest, untruthful, or did not negotiate in good faith (“Fraudulent Practices”). Furthermore, if any Party’s actions are considered Fraudulent Practices, they may be subject to legal and financial penalties to the fullest of the law.
VIII. GOVERNING LAW. This Agreement shall be governed under the laws located in the State of [ STATE ] (“Governing Law”).
IX. ADDITIONAL TERMS. [ ADDITIONAL TERMS & CONDITIONS ]
X. ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement between the Parties. No modification or amendment of this Agreement shall be effective unless in writing and signed by both Parties.
Debtor Signature: ______________________________ Date __________
Print Name: ______________________________
Assuming Party Signature: ______________________________ Date __________
Creditor Signature (if required): ______________________ Date __________
How to Write
Section 1 the parties.
(1) Effective Assignment Date. This agreement must clearly establish the calendar date when the assignment of the debt to the Assuming Party becomes active.
(2) Debtor Name And Mailing Address. The current Holder of the debt should be identified as the Debtor in this agreement. To this end, record the Debtor’s name and address.
(3) Assuming Party. The name of the Party that will be charged with paying the debt will be the Assuming Party. Furnish the Assuming Party’s entire name and mailing address.
(4) Creditor Name And Address . Naturally, it will be important that the debt is properly defined. This requires that the Creditor is named and that his or her mailing address is presented. If this is a Business then its legal Company Name must be used to identify the Creditor properly.
Section 2 Assignment Of Debt
(5) Sum Of Debt. The amount of money required by the debt being discussed is needed to complete the statement made in Section 2. This must be the total dollar amount that the Creditor expects the Debtor to pay.
(6) Assuming All Debt. The debt that is being transferred requires definition. If the total amount of the debt owed by the Debtor will be transferred to the Assuming Party, then the “All Of The Debt” checkbox should be selected.
(7) Assignment Of Portion Of Debt . If the Assuming Party will only take on part of the concerned debt then select the “Portion” checkbox. In addition to this selection, supply the dollar amount that the Assuming Party will pay to the Creditor to satisfy the part of the debt held by Debtor.
Section III Consent From Creditor
(8) Creditor Consent Required. In some cases, the Creditor must be informed of this assignment and provide consent for the Debtor and Assuming Party’s actions in this document. If so, then select the first checkbox statement from Section III. Additionally, supply the number of days before the effective date when the Creditor consent must be provided.
(9) No Consent Of Creditor Required. Select the “Not Required” checkbox to indicate that the Creditor’s consent is not needed for this contract’s execution.
Section VIII Governing Law
(10) Governing Law. Identify the State where this agreement will be effective and be enforceable.
Section IX. Additional Terms
(11) Additional Terms. Any agreements between the Debtor and the Assuming Party or conditions placed by the Creditor that should be considered part of this assignment should be documented in Section IX.
(12) Debtor Signature . The Debtor must approve of the information defining this assignment. For this task, he or she must sign and date this document upon satisfactory review. The Debtor should attend the first line presented in the signature area by signing his or her name on it.
(13) Debtor Signature Date.
(14) Debtor Printed Name .
(15) Assuming Party Signature. The Assuming Party must submit his or her signature to participate in this contract.
(16) Signature Date Of Assuming Party. The date when the Assuming Party signed this agreement must be noted.
(17) Printed Name Of Assuming Party.
(18) Creditor Signature And Date. In order for the Creditor to approve of this agreement, he or she must sign it or a Signature Representative appointed by the Creditor must supply this approving signature.
(19) Creditor Signature Date. Upon the signing, the Creditor’s Signature Party must define the current date.
(20) Printed Name Of Creditor . The printed name of the Creditor’s Signature Party is expected.
- Insights & events
Assigning debts and other contractual claims - not as easy as first thought
Harking back to law school, we had a thirst for new black letter law. Section 136 of the Law of the Property Act 1925 kindly obliged. This lays down the conditions which need to be satisfied for an effective legal assignment of a chose in action (such as a debt). We won’t bore you with the detail, but suffice to say that what’s important is that a legal assignment must be in writing and signed by the assignor, must be absolute (i.e. no conditions attached) and crucially that written notice of the assignment must be given to the debtor.
When assigning debts, it’s worth remembering that you can’t legally assign part of a debt – any attempt to do so will take effect as an equitable assignment. The main practical difference between a legal and an equitable assignment is that the assignor will need to be joined in any legal proceedings in relation to the assigned debt (e.g. an attempt to recover that part of the debt).
Recent cases which tell another story
Why bother telling you the above? Aside from our delight in remembering the joys of debating the merits of legal and equitable assignments (ehem), it’s worth revisiting our textbooks in the context of three recent cases. Although at first blush the statutory conditions for a legal assignment seem quite straightforward, attempts to assign contractual claims such as debts continue to throw up legal disputes:
- In Sumitomo Mitsui Banking Corp Europe Ltd v Euler Hermes Europe SA (NV)  EWHC 2250 (Comm), the High Court held that a performance bond issued under a construction contract was not effectively assigned despite the surety acknowledging a notice of assignment of the bond. Sadly, the notice of assignment failed to meet the requirements under the bond instrument that the assignee confirm its acceptance of a provision in the bond that required the employer to repay the surety in the event of an overpayment. This case highlights the importance of ensuring any purported assignment meets any conditions stipulated in the underlying documents.
- In Promontoria (Henrico) Ltd v Melton  EWHC 2243 (Ch) (26 June 2019) , the High Court held that an assignment of a facility agreement and legal charges was valid, even though the debt assigned had to be identified by considering external evidence. The deed of assignment in question listed the assets subject to assignment, but was illegible to the extent that the debtor’s name could not be deciphered. The court got comfortable that there had been an effective assignment, given the following factors: (i) the lender had notified the borrower of its intention to assign the loan to the assignee; (ii) following the assignment, the lender had made no demand for repayment; (iii) a manager of the assignee had given a statement that the loan had been assigned and the borrower had accepted in evidence that he was aware of the assignment. Fortunately for the assignee, a second notice of assignment - which was invalid because it contained an incorrect date of assignment - did not invalidate the earlier assignment, which was found to be effective. The court took a practical and commercial view of the circumstances, although we recommend ensuring that your assignment documents clearly reflect what the parties intend!
- Finally, in Nicoll v Promontoria (Ram 2) Ltd  EWHC 2410 (Ch), the High Court held that a notice of assignment of a debt given to a debtor was valid, even though the effective date of assignment stated in the notice could not be verified by the debtor. The case concerned a debt assigned by the Co-op Bank to Promontoria and a joint notice given by assignor and assignee to the debtor that the debt had been assigned “on and with effect from 29 July 2016”. A subsequent statutory demand served by Promontoria on the debtor for the outstanding sums was disputed on the basis that the notice of assignment was invalid because it contained an incorrect date of assignment. Whilst accepting that the documentation was incapable of verifying with certainty the date of assignment, the Court held that the joint notice clearly showed that both parties had agreed that an assignment had taken place and was valid. This decision suggests that mistakes as to the date of assignment in a notice of assignment may not necessarily be fatal, if it is otherwise clear that the debt has been assigned.
The conclusion from the above? Maybe it’s not quite as easy as first thought to get an assignment right. Make sure you follow all of the conditions for a legal assignment according to the underlying contract and ensure your assignment documentation is clear.
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