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What is a deed of assignment: a written document used to transfer a claim from one party (the assignor) to another (the assignee). Legally, assignment is regulated in Article 3:94 of the Dutch Civil Code. You use it when you wish to sell or transfer an outstanding invoice or a monetary claim — for example, in the case of factoring, financing, or the sale of a portfolio of receivables. The claim itself moves to a new creditor; the debtor must henceforth pay that new party.
The short answer
- What: a deed by which a claim is transferred to a new creditor (Art. 3:94 BW).
- Two forms: public assignment (with notification to the debtor) and silent assignment (without notification, but registered).
- Who: assignor (old creditor) transfers to assignee (new creditor).
- For what purpose: factoring, financing, sale of accounts receivable, security.
- Key point: without a valid deed, the claim does not transfer.
What exactly is a deed of assignment?
A claim is a right to demand payment or performance — usually an outstanding invoice. That right is an asset, and assets can be transferred. Assignment is the legal term for that transfer. The deed specifies which claim is transferred, from whom to whom, and under what conditions.
Article 3:94 of the Dutch Civil Code sets out two requirements for a valid transfer: there must be a deed, and (in the case of public assignment) notification to the debtor. Without a deed, there is no transfer — an oral agreement is insufficient. The deed does not need to be a notarial deed; a private deed (simply a signed document) suffices.
Public assignment vs. private assignment
The Civil Code provides for two routes, and the difference lies in the moment the debtor is informed:
- Public assignment (Art. 3:94, paragraph 1, of the Dutch Civil Code). The transfer is notified to the debtor. Only after that notification is the transfer effective against the debtor. The debtor must then pay the new creditor.
- Silent assignment (Art. 3:94, paragraph 3 of the Dutch Civil Code). No notification to the debtor, but the private deed is registered with the Tax and Customs Administration (or it is an authentic deed). The debtor is unaware of this and continues to pay the original creditor as usual until notification is eventually provided.
Silent assignment is popular in financing and factoring: the client need not notice that invoices have been transferred to a bank or factoring company. As long as nothing goes wrong, the debtor continues to pay into the trusted account.
The notification to the debtor
Notice is the pivotal point. In the case of public assignment, notice is constitutive: without notice, there is no effective transfer against the debtor. In the case of silent assignment, the new creditor may still give notice at any time — from that moment on, the debtor must pay him.
If the debtor still makes payments to the old creditor without having received the notification, he is discharged from the obligation: he does not have to pay twice. Therefore, demonstrable notification (in writing, with proof of receipt) is important for the new creditor.
Registration in case of silent assignment
For a valid silent assignment, the private deed must be registered with the Tax and Customs Administration. This is a simple, cost-free procedure: the deed receives a date stamp establishing that it existed at that moment. This prevents backdating and gives the transfer a fixed date.
Without registration (and without an authentic deed), the silent assignment does not take effect. The claim then remains with the original creditor — a costly mistake if the assignor has since gone bankrupt.
What is assignment used for?
- Factoring. A company sells its outstanding invoices to a factoring company and receives money immediately, instead of waiting weeks for payment.
- Financing. A bank requires the assignment of claims as security for a loan.
- Sell accounts receivable portfolio. A collection agency buys a package of outstanding claims.
- Restructuring or business transfer. Receivables transfer to another entity.
An SME example: a wholesaler with many outstanding invoices does not want to wait for payment terms of 60 days. Through factoring, he transfers the invoices to a factoring company (assignment) and immediately receives the majority of the amount. The factoring company collects the invoices itself.
Honest recommendation
For a one-off, simple transfer of a single clear invoice between two parties who agree, you do not necessarily need a lawyer — a proper deed with the correct description of the claim and (in the case of silent assignment) registration suffices. Moreover, with a standard factoring contract, the factoring company provides the deed.
Do have it reviewed whenever it concerns a portfolio of receivables, assignment of security in financing, future receivables, or a prohibition on assignment in the underlying contract. In such cases, the precise wording determines whether the transfer holds up, even in the event of bankruptcy.
Read more: drafting a deed of assignment and having a deed of assignment drafted. Need a template? See deed of assignment.
Frequently Asked Questions
A written document used to transfer a claim from the original creditor (assignor) to a new creditor (assignee). Regulated in Article 3:94 of the Dutch Civil Code. Used in factoring, financing, and the sale of receivables. Without a valid deed, the claim does not transfer.
In the case of a public assignment, the transfer is notified to the debtor; only then does the transfer take effect against him. In the case of a silent assignment, there is no notification, but the private deed is registered with the Tax and Customs Administration. The debtor then continues to pay the original creditor until notification is subsequently provided.
No. A private deed (a simply signed document) suffices. In the case of silent assignment, however, that deed must be registered with the Tax and Customs Administration, or it must be an authentic (notarial) deed. A notarial deed is therefore not mandatory.
That you notify the debtor that the claim has been transferred and that he must henceforth pay the new creditor. In the case of public assignment, such notification is mandatory for it to be effective. If the debtor continues to pay the old creditor without having received notification, he is discharged.
Registration with the Tax and Customs Administration gives the deed a fixed date and prevents backdating. Without registration (and without an authentic deed), the silent assignment does not take effect and the claim remains with the original creditor — risky in the event of the assignor's bankruptcy.
Especially in factoring (selling invoices for immediate liquidity), financing (receivables as security for the bank), the sale of a portfolio of receivables to a collection agency, and in business transfers or restructurings where receivables are transferred along with them.
Usually yes, but not always. The underlying contract may contain a prohibition on assignment, making transfer impossible or impossible without consent. Furthermore, some highly personal claims are non-transferable. Check the contract before the assignment.
