(1) The other party may give its consent in advance.
(2) If the other party has given its consent in advance, the assignment of the contract becomes effective when a notice of the assignment is given to the other party or when the other party acknowledges it.
1. Advance consent by the other party
Paragraph (1) of this Article provides that the other party’s consent, required under Article 9.3.3, may be given in advance.
This rule, concerning the assignment of contracts, corresponds to the rule in Article 9.2.4 according to which the obligee, who must consent to the transfer of the obligation may give its consent in advance. Similarly, the other party, who must consent to the assignment of the contract, may also give its consent in advance.
1. Company X enters into an agreement with agency A, providing that the latter will be responsible for advertising X’s products in country M for the next five years. A, however, is already considering ceasing its activities in country M in the not too distant future, and obtains X’s advance consent to the subsequent assignment of the contract to agency B, located in country M’s capital. This advance consent is effective under Article 9.3.4.
2. When the assignment of the contract is effective vis-à-vis the other party
According to paragraph (2), if the other party has given its consent in advance, the assignment of the contract becomes effective when it is notified to the other party or when the other party acknowledges it. This means that it is sufficient for either the assignor or the assignee to notify the assignment when it occurs. Notification is not needed if it appears that the obligee has acknowledged the transfer, to which it had given its consent in advance. “Acknowledgement” means giving an overt sign of having become aware of the transfer.
2. The facts are the same as in Illustration 1. When A actually assigns its contract to B, the assignment becomes effective vis-à-vis the other party when either A or B notifies it to X.
3. The facts are the same as in Illustration 1. No notice is given, but B sends X a proposal for a new advertising campaign. X understands that the assignment has taken place and sends its comments on the proposal to B. The assignment of the contract is effective with this acknowledgement.