“Assignment of a right” means the transfer by agreement from one person (the “assignor”) to another person (the “assignee”), including transfer by way of security, of the assignor's right to payment of a monetary sum or other performance from a third person (“the obligor”).
In many circumstances an obligee entitled to the payment of a monetary sum or to another performance from an obligor may find it useful to assign its right to another person. For instance, an assignment to a bank is a common way to finance the credit granted to a customer. The Articles of the present Section cover the assignment of rights as defined in this Article.
1. Transfer by agreement
Only transfers by agreement are concerned, as opposed to situations in which the applicable law may provide for legal transfers of certain rights (such as, in certain jurisdictions, the transfer of a seller’s rights against an insurer to the purchaser of an insured building, or the automatic transfer of rights in the case of the merger of companies (see Article 9.1.2(b)).
The definition equally does not cover unilateral transfers, which in certain jurisdictions may take place without the assignee’s participation.
2. Right to payment of a monetary sum or to other performance
On the other hand, the definition is not restricted to the assignment of rights to the payment of a monetary sum. It also covers rights to other kinds of performance, such as the rendering of a service. Nor are the assignable rights limited to rights of a contractual nature. Claims deriving from non-contractual claims or based on a judgment, for instance, can be governed by the present Section, subject to Article 1.4. Future rights may also be transferred under the conditions of Article 9.1.5.
3. Notion of “transfer”
The “transfer” of the right means that it leaves the assignor’s assets to become part of those of the assignee. The definition also covers transfers for security purposes.
4. Third party rights
Transfers from the assets of the assignor to those of the assignee remain subject to third party rights. Different third persons can be affected by the assignment of a right between an assignor and an assignee, such as, first and foremost, the obligor, but also the assignor’s creditors and successive assignees. Third party rights are covered in part by other provisions of this Section (see Articles 9.1.10 and 9.1.11 concerning the obligor and successive assignees). They may in some instances be governed by mandatory rules of the otherwise applicable law (e.g. the law of bankruptcy).