One of the main problems related to the assignment of
receivables in international trade is determining the extent of the
rights that are being assigned (also those rights that relate to
the validation of the assignment of future receivables and
anti-assignment clauses). Every legal system, therefore, aims to
enact rules that provide certainty to the parties involved.
In the event of a conflict of laws, and in the absence of a
governing law provision, the formal and substantive requirements of
a purchase and assignment agreement are governed by the laws of the
place where the agreement is executed. However, all the effects of
the agreement (ie the rights and obligations arising from it) that
take place in Chile must be controlled by Chilean law.
Under general contractual principles, the name that parties give
to a specific transaction, as well as the technical and literal
terms in which it may be framed or structured, are irrelevant when
it comes to determining its precise nature and substance.
Consequently, they are also irrelevant for the purpose of deciding
the legal and regulatory provisions that will govern the
transaction. General contractual principles require the lawyer to
look into the substance of a transaction, and into the intention of
the parties involved.
The Civil Code and the Commercial Code provide that an
assignment of credit or receivable is perfected between the
assignor and the assignee by means of the delivery of the title for
the credits or receivables.
Under the same legal provisions, the purchaser and assignee is
considered the true holder of the credit, as far as the obligor and
all other third parties are concerned (including the obligor's
creditors). This is the case after due notice has been given to the
obligor that the sale and assignment of the relevant credit has
taken place.
Notice must be given by a ministro de fe (usually a notary
public), by showing the obligor the title to the assigned credits
or receivables. A statement signed by the assignor evidencing the
assignment must also be shown.
The assignee may also be considered the true holder of the
credit as far as the obligor and all other third parties are
concerned, by way of express or implied acceptance of the
assignment by the obligor. An implied acceptance would consist of
the payment of any sum owed under the receivables or any action
taken by the obligors from which their acceptance may be
inferred.
If the assignment is completed with the obligors and third
parties by serving notice, the obligors may reserve any personal
rights (eg rights of set-off and compensation) they would have been
able to exercise against the assignor. This is provided that the
reserve of rights is made when the notice of the assignment is
served on the assignor or within three days from the date the
notice is served. If, however, the obligors have accepted the
assignment unconditionally, then they are not entitled to claim
against the assignee any personal rights they may have against the
assignor.
Prior to the assignment notice being served on the obligors, or
the acceptance of assignment by them, title to the credit or
receivable is deemed to be held for all purposes by the assignor.
Consequently: (i) any payment that the obligors may make on account
of the credit or receivable must fully discharge the obligors; and
(ii) any credit or receivable may be validly attached or seized by
the creditors of the assignor.
Cristián Eyzaguirre