- Elgar original reference
Edited by Jan M. Smits
Chapter 7: Assignment*
The term ‘assignment’ means a transaction whereby a right to performance by a debtor is transferred from its owner, the ‘assignor’, to another person, the ‘assignee’, on the basis of a legal provision (assignment by operation of law) or on the basis of an agreement between assignor and assignee (assignment by agreement). An assignment having been effected, the assignee is entitled to sue the debtor for performance (Kötz, 1992, p. 52). The following deals only with assignments by agreement and not with assignments by operation of law. The transfer of title in property is outside the scope of this chapter as well. Rights to performance by a debtor (claims) are a very important asset in domestic as well as international trade. In particular, the assignment of a company’s claims plays an important role in the financing of the company’s regular business and in project financing. Frequently, the assignment of a company’s claims against its customers serves to secure credit risks and as a source of repayment of credits. The use of claims as instruments of financing is not only in the interest of the company itself, but is more generally to be considered an efficient and desirable means of using an economy’s resources. Thus the legal rules on the assignment of rights and claims are of considerable importance for large sectors of the economy: the financing opportunities of companies dealing in goods and services, the factoring branch and the whole banking and financing sector.
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