Positioned within contract law, this new work deals with the assignment of things in action – debts, contractual rights etc. It deals only with voluntary assignment and not compulsory assignment as with bankruptcy or liquidation.
This book is intended for the practitioner who has a problem, issue or case involving the voluntary assignment of things in action, either in giving advice or preparing litigation. Following the approach of titles such as Chitty on Contracts, this work enables the practitioner to find a statement of the law and then (if necessary) the authority that supports it.
- Provides a thorough statement of the law of voluntary assignment including, for each issue or topic, the authority that supports it
- Goes through the nature of assignment, commencing with a definition of assignment, before outlining and giving examples of choses in action; detailing the requirements for assignment; and looking at the relationship of assignment and other transactions
- Examines the law of assignments under section 136 of the Law of Property Act 1925, explaining its effect and requirements, and including the assignment of an equitable chose under section 136
- Goes through equitable assignment and agreements to assign, covering both an equitable assignment of an equitable chose and of a legal chose
- Deals with restrictions on assignment, covering contractual terms forbidding assignment, prohibition by statute or public policy, and personal contracts and covenants
- Covers the position of creditors, trustees in bankruptcy and personal representatives of the assignor, and the liquidator of an assignor company
- Analyses the problems associated with priorities, including those between competing assignees, competing holders of interests in shares, and an assignee and a chargee under a charge created by a company
- Considers special priority rules and variation of priorities
- Establishes defences available to the obligor under assignments subject to equities, including defences that impeach the existence or enforceability of the chose in action assigned, set-off, and right of retainer
- Reviews available financing devices involving assignment, with coverage of financing of receivables, factoring, block discounts, and securitisation
- Looks at situations where there is assignment of obligations or liabilities
- Addresses conflict of laws, centring on the law applicable to contractual obligations under Article 14 “the Rome I Regulation”, as well as Transactions outside Article 14
- Covers key case law, including analysis of the rule in Dearle v Hall (1828) on priorities between competing assignees; Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd (1994) on prohibition of assignment; Pan Ocean Shipping Co Ltd v Credit Corp Ltd (1994) on position of the assignee; Raiffeeisen Zentralbank Osterreich AG v Five Star General Trading LLC (2001) as indicative of the correct interpretation of Article 14 of Regulation (EU) 593/2008 (“the Rome I Regulation”)
- Written in the Common Law Library style to enable the practitioner to find a statement of the law then (if necessary) go to the authority that supports it.
- Eminent author who is a former General Editor of Chitty on Contracts and Benjamin’s Sale of Goods
26 October 2017Lucy Reeve - Lucy Fergusson
Ban on restricting assignment of receivables
Draft regulations have been published which will nullify contractual clauses which ban the assignment of receivables under a contract for goods, services or intangible assets. This is intended to allow businesses owed money to more easily use their invoices as collateral for loans (also known as invoice discounting).
Non-assignment clauses will only be ineffective in business-to-business contracts. There are exemptions for contracts relating to financial services (e.g. insurance, banking or asset management contracts); which create an interest in land; or a contract where one or more of the parties to the contract is acting for purposes which are outside a trade, business or profession.
The prohibition applies to contracts under the law of England and Wales or Northern Ireland but not Scotland, and does not apply to contracts where the law of England and Wales or Northern Ireland applies by the choice of the parties and, if it were not for the choice of law, the law of Scotland or a country outside the UK would apply. However, a choice of another country's law will not work if the purpose is wholly or mainly to avoid the operation of the regulations.
This was one of the measures introduced in March 2015 in the Small Business, Enterprise and Employment Act 2015 that needs to be activated by a statutory instrument. It is expected the Regulations will come into force by the end of 2017.
Click here for the draft Business Contract Terms (Assignment of Receivables) Regulations 2017.