Tip: also pay attention to the determinability requirement in the deed of assignment

A deed of assignment is only legally valid if the transferred claim is sufficiently ascertainable. The deed itself must contain enough objective information to determine – if necessary retrospectively – exactly which claim or claims are involved. A vague description such as "all outstanding claims" is by no means always sufficient. If the deed fails to meet the ascertainability requirement, you run the risk that the transfer is invalid and the assignee is left with an uncollectible claim – and possibly a claim for damages.

What is a deed of assignment?

With a deed of assignment, a creditor (the assignor) transfers a claim to a new creditor (the assignee). From that moment on, the assignee can collect the claim as if it were their own. Assignment is regulated in Article 3:94 of the Dutch Civil Code.

In practice, assignment is used for various purposes, for example:

• transferring claims to a collection or factoring party, as an alternative to outsourcing collection;
• bundling or selling a portfolio of outstanding invoices;
• insurance matters, where the right to compensation is transferred to the insurer that paid the damage.

The law distinguishes between two forms: public assignment, in which the debtor is notified, and silent assignment, in which this does not (yet) occur and a notarial or registered private deed is required. In both cases, the requirement of determinability applies.

The claim must be sufficiently ascertainable

No excessively strict formal requirements are imposed on the content of a deed of assignment. Case law shows that the claim does not need to be written out in detail in the deed. What does apply, however, is the requirement of determinability: the deed must contain sufficient information so that – possibly retrospectively and on the basis of objective data – it can be established which claim is involved.

This requirement stems from Article 3:84 paragraph 2 of the Dutch Civil Code, which stipulates that the asset to be transferred must be described with sufficient specificity at the time of the transfer. The Supreme Court interprets this relatively flexibly for claims: a generic description may suffice, provided that the transferred claim is identifiable therewith.

How do you meet the determinability requirement?

The determinability requirement does not require that every claim be fully described in the deed. It suffices that the claim can be determined retrospectively, on the basis of objective data that are included in the deed. In practice, this is often done as follows:

• an attachment containing characteristics of the claims or rights is included (for example, debtor numbers, invoice numbers, or file numbers);
• Further specifications are omitted but can be requested from the cedent's records at a later date;
• Reference is made to the legal relationship from which the claims arise.

By only requesting specifications when necessary, the privacy of those involved remains better protected if the deal falls through. In that case, however, do include clear agreements regarding the requesting and sharing of those specifications. After all, good agreements make good friends – and prevent disputes afterwards.

Checklist: this should be included in a determinable deed of assignment

When reviewing your own deed, pay attention to at least the following points:

• an indication of the claims by means of objective characteristics (invoice, debtor, or file numbers) or a dated attachment;
• a reference to the underlying legal relationship from which the claims arise;
• an agreement regarding requesting specifications from the cedent's records;
• confirmation that the claims already exist at the time of the deed or arise from an existing legal relationship;
• an arrangement regarding liability and costs if collection fails later.

Practical example

A company sells a portfolio of outstanding invoices to a factoring party. The deed does not list every invoice, but it does contain a reference to a dated appendix with debtor and invoice numbers, plus the agreement that underlying invoices will be provided by the assignor upon request. Consequently, it can be objectively established for each claim that it falls under the assignment – ​​and the transfer is ascertainable.

Determineability is more than just a description

The determinability requirement is one of the most frequently used arguments to contest an assignment. Consequently, there has been much litigation regarding it. This shows that determinability is more than a vague description where subsequent administration must provide clarity. There must also actually be a transferable claim.

An important point of attention in this regard is the assignment of future claims. The law permits the transfer of a future claim "in advance" (Article 3:97 of the Dutch Civil Code), but there are limits to this. For a silent assignment, for example, the claim must arise from a legal relationship that already exists at the time of the assignment (Article 3:94, paragraph 3, of the Dutch Civil Code). If a claim is transferred that arises from an agreement that did not yet exist at all at the time of the deed, that claim can generally not be sufficiently ascertainable. Otherwise, the determinability requirement would become a dead letter.

Therefore, check not only whether the claim is properly described, but also whether the claim actually already exists (to a sufficient degree) at the time of the deed or arises from an existing legal relationship.

Consequences for the deed of assignment

The determinability requirement has direct consequences for how you draft a deed of assignment. A few practical points to consider:

1. Pay attention to the underlying claim. For example, include a file or invoice number that can be retrieved from the administration via a standard procedure.
2. Be cautious with deliberately vague wording. Sometimes a deed is drafted broadly to maintain maximum room for maneuver. This increases the risk of uncollectibility due to a lack of determinability.
3. Arrange the consequences in advance. If collection fails due to a defective deed, a claim for damages from the assignee is not inconceivable – especially if legal costs have already been incurred.

Parties can make agreements regarding this in advance through clear clauses. Examples include a provision for requesting specifications, a clause regarding liability for uncollectibility, an agreement to first mediate in disputes, and possibly a forum selection clause. At its core, this is a matter of careful contract law: therefore, it is preferable to have a deed of assignment legally drafted or reviewed before signing.

Frequently asked questions about the deed of assignment

What is the determinability requirement for assignment?

The determinability requirement entails that a deed of assignment must contain sufficient objective information to establish which claim is being transferred. This requirement stems from Article 3:84, paragraph 2, of the Dutch Civil Code. The claim does not need to be fully written out, but it must be identifiable—if necessary, retrospectively.

Must each claim be listed separately in the deed of assignment?

No. A generic description or a reference to an attachment containing characteristics (such as invoice or debtor numbers) may suffice, provided that each claim can be objectively determined therefrom. Specifications may be retrievable from the assignor's records retrospectively.

Can you transfer a future claim via assignment?

In principle, this is possible "in advance" (Article 3:97 of the Dutch Civil Code), but there are limits. For a silent assignment, the claim must arise from a legal relationship that already exists at the time of the deed. Claims arising from an agreement that does not yet exist are generally not sufficiently ascertainable.

What is the difference between public and private assignment?

In the case of a public assignment, the debtor is notified of the transfer; only thereafter can the assignee collect from him. In the case of a silent assignment, this notification does not (yet) take place, and a notarial or registered private deed is required. In both cases, the claim must be sufficiently ascertainable.

What happens if the deed of assignment is undeterminable?

In that case, you run the risk that the transfer is not legally valid. The assignee may then be unable to collect the claim and may – depending on the agreements – hold the assignor liable for damages, especially if costs have already been incurred.

Is assignment an alternative to a collection agency?

Assignment can play a role in transferring or selling claims, but it is not a one-to-one replacement for debt collection. Often, a targeted collection approach more effective in getting an outstanding invoice paid. Seek advice on the route that best suits your situation.

Have your deed of assignment legally reviewed

At MKB Juristen, we systematically pay attention to the ascertainability of the deed of assignment. This forms the backbone of the transaction and determines whether the claim is actually collectible. In addition, we safeguard the interests of both the assignee and the assignor, so that you prevent problems afterwards. Read more about a deed of assignment or view our options for debt collection and legal assistance.

Would you like to have your deed drafted or reviewed, or know if assignment is advisable in your situation? Schedule a no-obligation intake and we will immediately explain what you need to look out for.