Assignment of a contract and of a claim

Transferring a contractual relationship or a simple claim to someone else is an everyday operation in the life of businesses: a claim is assigned to raise finance, a lease is transferred together with a branch of activity, client portfolios change hands in an acquisition. Yet behind this apparent simplicity lie two different legal institutions, with distinct requirements and consequences. Confusing them is one of the most frequent causes of ineffective transfers. Let’s look at the difference between the assignment of a claim and the assignment of a contract under Swiss law.

Assigning a claim or assigning a contract

The underlying distinction is clear:

• the assignment of a claim transfers a single right — the entitlement to receive a performance, typically the payment of a sum — from a creditor (the assignor) to a new creditor (the assignee);
• the assignment of a contract transfers the entire contractual position, that is, the whole bundle of rights and obligations that a party holds in a relationship: whoever takes over becomes a party to the contract in place of the assignor.

The practical difference is enormous. In the first case only a claim moves; in the second an entire relationship moves, with all the performances still to be carried out.

The assignment of a claim

The assignment of a claim is governed by the Code of Obligations and is characterised by an important rule: it does not require the debtor’s consent. The creditor may assign their claim to a third party without asking permission from the person who has to pay, unless the assignment is excluded by law, by the agreement between the parties (a non-assignment clause) or by the nature of the relationship.

The essential requirements are:

• written form: the assignment of a claim is valid only if made in writing. It is a requirement of validity, not a mere recommendation;
• determinacy of the assigned claim, or at least its determinability.

The debtor’s consent is not needed, but notification is, in practical terms: until the debtor is informed of the assignment, they pay freely to the old creditor and are discharged. Anyone acquiring a claim therefore has every interest in notifying the transfer promptly.

The claim passes to the assignee with its ancillary rights — accrued interest, security, rights of pledge — but the debtor retains, against the new creditor, the defences they could have raised against the assignor at the time they became aware of the assignment.

The assignor’s warranties

Anyone who assigns a claim for consideration is liable, unless otherwise agreed, for the existence of the claim at the time of assignment (warranty of veracity), but not for the solvency of the debtor (warranty of collectability), unless they have expressly promised it. In other words, the assignor warrants that the claim exists, not that it will actually be collected. Anyone acquiring portfolios of claims must take this into account in the price and in the clauses.

The assignment of a contract

Transferring the entire contractual position is more complex, because the obligations move together with the rights. And here the logic is reversed: since the operation includes an assumption of debts towards the other party, the assignment of a contract generally requires the consent of the remaining party. No one can have their debtor replaced without a say, because the counterparty’s solvency and reliability matter.

Consent may be:

• prior, if the original contract already provides for the possibility of assigning it and the counterparty has accepted this in advance;
• subsequent, given at the time of the transfer.

Technically, the assignment of a contract breaks down into an assignment of claims and an assumption of debts, but it must be treated as a single whole so as not to leave part of the relationship “orphaned”. It is the typical operation in business transfers, where leases, supply and service contracts must pass to the buyer together with the business.

Mistakes to avoid

Transfers that do not hold up almost always stem from the same defects: absence of written form in the assignment of a claim, non-assignment clauses ignored, absence of the counterparty’s consent in the assignment of a contract, failure to notify the debtor, warranties left unregulated. Before transferring a claim or a relationship, it is advisable to check the text of the original contract, which may contain limits or conditions.

How we work at SIH ONE

We structure assignments of claims and of contracts in the context of financings, restructurings and business transfers, taking care of form, notifications, consents and warranty clauses. We check non-assignment clauses and coordinate the civil-law aspects with the tax aspects of the operation.

Do you need to transfer claims or contractual relationships effectively and enforceably? Discover the services of our tax-legal division and structure the operation without flaws.