7. Assignment

Question 1

What is required for assignment of powers?

Answer 1

Initial financing statement reflects assignment

Creditor files new financing statement with amendment

Question 2

What are Obligor’s defences against Assignee?

Answer 2

1) Same defences against Assignor

2) Defence accrued BEFORE Obligor received notice re assignment

Question 3

What is required for modification of assigned contract against Assignee?

Answer 3

1) Good faith

2) To extent of;
- Payment not fully earned
- Payment fully earned + Obligor not received notice re assignment

Question 4

What is required for Obligor to discharge his obligations?

Answer 4

Before receiving notice

After receiving notice + paying Assignee (NOT Assignor)

Question 5

Which restrictions are not allowed on assignment?

Answer 5

Agreement

• Prohibition
• Restriction
• Obligor’s consent requirement
• Default result
• Breach result

Question 6

How may creditor assign account receivables?

Answer 6

1) Creditor must have previously had interest in accounts
2) Creditor must notify Debtor of disclaimer (within 14 days of request for accounting of unpaid debts)
3) Creditor must notify Debtor of successors/assignees