Our Dutch English-speaking attorneys will inform you about how you can assign or transfer claims, ancillary rights, and contracts under Dutch law and what an assignment of a claim under Dutch law means for you as a debtor. An assignment in the legal sense is when one person (assignor) transfers a selected claim to another person (assignee). A claim is a property right that can only be enforced by legal means, but not by taking possession, such as a debt or a right to compensation. In the following article, our specialist in contract law explains the subject of assignment of a claim under Dutch law.
The following example illustrates an assignment under Dutch law:
Person A owes a debt to person B. Person B can assign the claim, for example the legal claim to the money, to person C. Person A is then obliged to pay the money to person C and not to person B. As soon as the liability is legally assigned, C can enforce payment of the liability, and only payment to C will cause the liability to expire.
Our English-speaking contract law attorneys in the Netherlands will be happy to assist you with any questions you may have regarding assignment and transfer.
How can a claim be assigned under Dutch law?
Under Dutch law, the general rule is that a claim can always be assigned, unless assignment is excluded by law or contract. This is governed by article 3:83 paragraph 1 of the Dutch Civil Code (burgerlijk wetboek – BW). The parties may stipulate in the contract that an assignment of claims is excluded (Article 3:83(2) of the Civil Code). For example, in the case of a distribution agreement, a party may wish to prevent the distributor from assigning the distribution right to a third party. Such a clause could, for example, take the following form under Dutch law:
“Neither Party may assign or transfer any right under this Agreement to a third party without the prior written consent of the other Party. This restriction is effective according to Article 3:83 ab 2 BW.”
Does your contract contain such a clause or a similar clause? Feel free to contact us – our Dutch specialist attorneys for contract law in the Netherlands will be happy to advise you on the subject of assignment or prohibition of assignment.
Transfer of ownership of a claim
The assignment of a claim requires the “levering” of the claim. There are two ways to transfer a contractual claim:
Pursuant to Article 3:94(1) of the BW, a claim may be transferred by means of a notarial deed and subsequent notification to the debtor or the person against whom the right to claim exists. Either the assignor or the assignee can execute this notification. In this situation, the assignment is not complete until the debtor has received the notification.
In addition, an assignment pursuant to Article 3:94, para. 2 of the BW can also be affected by means of a notarial recording. In this case the debtor does not have to be notified in order to execute the assignment. However, the claim cannot be claimed or enforced against the debtor until the debtor has been notified by the assignor or assignee.
Acquisition of subsidiary rights under Dutch law
It is also important that the assignee also acquires all rights associated with the claim after the assignment of the claim (Article 6:142 BW). Typical ancillary rights are liens, mortgages, or the right to enforce judgments relating to the claim. The acquisition of such an ancillary right can therefore be very advantageous for the assignee. The right to interest or to contractually agreed penalties are also part of such ancillary rights.
However, it should be noted that the assignment of the claim does not affect the debtor’s defences (Article 6:145 BW). For example, if the original contract between the assignor and the debtor contained a force majeure clause and an event occurs that can be classified as force majeure, the clause may still relieve the debtor of his obligation. The change of creditor therefore does not alter the debtor’s defences. Our English-speaking attorney will discuss the transfer of the contract under Dutch law
In most legal systems, assignment concerns only the transfer of rights but not of obligations. An assignment cannot therefore transfer the whole of a contractual position, including rights as obligations.
However, Article 6:159 BW provides that a contracting party may, with the consent of the other contracting party, transfer its contractual position to a third party by deed. All rights and obligations are thereby transferred to the third party, unless otherwise provided in relation to accessory rights (for example, a mortgage) or rights that have already become enforceable. This means that the new contracting party has in principle exactly the same rights and obligations as the original contracting party. For example, it will have the same performance obligations and the same rights of termination and damages for breach of contract by the other party.
It is particularly important to know all rights and obligations of the original contracting party. Our English-speaking attorneys in the Netherlands will be happy to assist you in this respect.
Adoption of a contract under Dutch law
Under Dutch law, the transfer of a contract to a third party requires a deed signed by the original contracting party and the party “taking over” the contract. However, there is no formal requirement for the consent of the other party to the contract, i.e. the party who remains the contracting party. Consent may be given orally, in writing or, in certain circumstances, even implied.
An important question that our English-speaking attorneys often have to answer under Dutch law is which contracts can be taken over under Dutch law. In principle, all contracts can be taken over according to the procedure described in article 6:159 BW. However, as in the case of assignment, you can stipulate in the contract that the transfer of the contract is not permitted. Legal advice is recommended due to the complexity of the subject matter.
Unfortunately, exceptions also confirm the rule when it comes to the transfer of contracts. Contracts where a transfer is not possible are for example
- Contracts that contain rights and obligations that have already been fulfilled and that are essential to the parties,
- agreements containing rights and obligations which are essential to the parties and which by their nature are not transferable,
- agreements which expressly exclude the right to transfer,
- Agreements containing rights and obligations that are not sufficiently defined.
Experience shows that legal advice is indispensable for cross-border legal transactions.
Dutch specialist attorney specialised in contract law
Do you have questions about Dutch contract law or do you need specific legal advice in Holland on the subject of assignment of a claim under Dutch law? Our experienced English-speaking attorneys in Holland will be happy to help you.