(1) To the extent that the assignment of a contract involves an assignment of rights, Article 9.1.13 applies accordingly. 

 

(2) To the extent that the assignment of a contract involves a transfer of obligations, Article 9.2.7 applies accordingly.

 

COMMENT

 

The assignment of a contract entails both an assignment of the original rights and a transfer of the original obligations from the assignor to the assignee. The transaction should not adversely affect the other party’s situation as an obligor and it should put the assignee in the same situation as the assignor in its capacity as obligor. 

 

As a consequence, the provisions concerning defences in Sections 1 and 2 of this Chapter apply accordingly. When the assignee exercises its rights, the other party may assert all the defences it could have asserted as obligor if the claim had been made by the assignor (see Article 9.1.13). When the other party exercises its rights, the assignee may assert all the defences that the assignor could have asserted as obligor if the claim had been made against it (see Article 9.2.7)

 

Illustrations

 

1. Company X has out-sourced its risk management department to consultant A. With X’s consent, the contract is assigned to consultant B. Due to A’s incompetence, X was not properly insured for a loss it subsequently suffered. Pending indemnification, X may suspend paying B the agreed fees.

 

2. Airline A has a contract with catering company X. A transfers the operation of its flights to certain destinations to airline B. With X’s consent, the catering contract is assigned by A to B. Litigation later arises, and X sues B before a court at its place of business. As a procedural defence B may successfully invoke that the assigned contract includes an arbitration clause.

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