Impossible subject matter in an assignment of a claim

Impossible subject matter in a contract for the transfer of a claim – assignment (Latin cessio, from cedere), a legal term for the surrender or transfer of property or a right.

An assigned claim is sufficiently identified if its distinguishing features are clearly stated: the parties, the amount and the basis of the claim.

Under Article 100(1) of the Obligations and Contracts Act, a creditor who assigns a claim for consideration is liable for its existence. An assignment of a non-existent claim therefore still creates contractual obligations between the parties: the contract is valid. The subject matter of an assignment is impossible only if the property right cannot be transferred because of its nature, a mandatory rule of law or a pre-existing contractual restriction. An assignment of a non-existent claim is not invalid. Moreover, the assignor is answerable for performance under Article 82 read in conjunction with Article 79 of the Act (see Order No. 524 of 19 July 2011 in commercial case No. 186/2010, Supreme Court of Cassation, Second Commercial Division). This is the basis on which the assignee could successfully assert its rights under the special rule in Article 100(1) of the Act.

An agreement assigning a monetary claim identified by its parties and amount has a possible subject matter. If the assignor does not own the claim, the agreement simply does not bring about the transfer it was intended to effect. Under Article 100(1), a creditor assigning a claim for consideration is liable for its existence. Thus, even if the claim does not exist, the assignment creates a contractual relationship between the parties, and the assignor is liable for failure to perform its contractual obligation.

If you have questions about transferring a claim by assignment, it is advisable to consult a lawyer experienced in the law of obligations.