Debt Assignment Agreement

The right or benefit being assigned may be a gift (such as a waiver) or it may be paid for with a contractual consideration such as money.The rights may be vested or contingent, Mortgages and loans are relatively straightforward and amenable to assignment.An assignment can therefore not transfer the entirety of a contractual position including both rights and obligations.

The right or benefit being assigned may be a gift (such as a waiver) or it may be paid for with a contractual consideration such as money.The rights may be vested or contingent, Mortgages and loans are relatively straightforward and amenable to assignment.

Importantly, the assignment of claim does not affect the debtor’s defences (art 5 the Dutch Civil Code).Example of an Assignment If person C owes a debt to person A, person A may assign the chose in action (the legal right to receive the money) to person B.Person C will then be required to pay the debt to person B rather than person A.However, the chose cannot be enforced against this person until they have notice from the assignor or assignee.One rationale for this provision is that if the assignor is declared bankrupt before the notice is given, but after the execution or registration of the deed, the assignment will already be complete and the chose in action in question will not be part of the bankrupt estate.Either the assignor or the assignee can give notice.In this situation, the assignment is not complete until the debtor has notice.This means that, in principle, the new contracting party will have exactly the same rights and obligations as the original contracting party.For example, they will have the same performance obligations and the same rights to termination and damages for breach of contract by the other party.Once the debt has been validly assigned, B will be able to enforce payment of the debt and only payment to B will extinguish the debt.Under Dutch law, the general rule is that a chose in action (such as a claim) unless assignment is precluded by law or the nature of the right (art (1) of the Dutch Civil Code).