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Deed of Assignment of Debt – Everything You Need to Know

Scott Nelson

Debt Expert

Scott Nelson is a renowned debt expert who supports people in debt with debt management and debt solution resources.

Janine Marsh

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Janine is a financial expert who supports individuals with debt management, cost-saving resources, and navigating parking tickets.

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Are you facing a ‘deed of assignment of debt’? Are you worried about a debt collector knocking on your door?

You’re in the right place. Each month, over 170,000 people visit our site looking for guidance on debt issues, just like this one. 

In this article, we’ll explain:

•  What a ‘deed of assignment’ is
•  What it means for your debts
•  Different types of assignment
•  Why companies sell their debts
•  Ways to handle your debt situation

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Deed of Assignment of Debt – the basics

Being in debt is confusing enough as it is. And it can get even more complicated when you get a letter through the door from a company you may never have heard of demanding (often in quite a strongly-worded way) that you make your payments to them instead.

What’s going on, you might ask yourself?

At the end of the day, the creditor will want the money that you owe back.

However, sometimes when an account falls into arrears , they won’t have the capabilities or resources to claim it back . This is when the original company you owe money might ‘ assign’ your debt . 

What is a Deed of Assignment of Debt?

This is notice that tells you that you now owe a debt collection agency or another collection service the money you originally owed to the creditor .

Instead of paying the company you might have originally owed money to, you now owe a third party company. 

A deed of assignment of debt is a legal documen t alerting you of the transfer of ownership of your debt to another person. The right to receive payment from the debt you owe is transferred over to this new party as well.

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What does it mean?

A deed of assignment of debt is used to transfer or sell the right to recover a debt .

Without a deed of assignment of debt, the two companies are not able to do this – you need a written transfer document. 

Once the transfer document, or deed of assignment of debt, has been signed by the assignee (the party transferring the debt) and the party receiving the debt ( assignor ), they must give notice to the debtor (the person that owes the company the sum of money).

Notice must be given within 7 days of assigning the debt. Unless someone gives notice to the debtor, then the new owner of the debt can’t enforce the debt by suing in court.

Is there more than one type of assignment? 

Confusingly, there are actually two different sorts of assignment that a creditor can make. These are Legal and Equitable.

Both types of assignment fall under the Law of Property Act 1925 , and both require the creditor to inform you of the change in writing – this is known as a notice of assignment of debt .

1. Legal Assignment

Legal assignment of debt gives the company who are purchasing the debt the power to enforce it .

Basically it means that you make payments to this company instead of the original creditor, and they can send you letters and make calls to your home.

2. Equitable

If a debt is an equitable assignment, only the amount you owe is transferred , and the original creditor will still retain the original rights and responsibilities .

The purchasing company will not be able to enforce the debt either.

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Why do companies sell their debts?

A deed of assignment of debt can be a real headache, as you now have another layer of money owed. You will probably rightly ask yourself – why? And how can they sell it?

It may seem strange and confusing, but it’s actually completely legal for them to sell your debt . When you sign a credit agreement, there is almost always a clause in fine print that states that the original creditor has the power to assign their rights to a third party.

As you have signed this agreement, they don’t actually need to ask for your permission to assign your debt.

This also means that you cannot dispute it or make a complaint about it either. The only exception to this rule is if you have given evidence of mental health issues .

» TAKE ACTION NOW:  Fill out the short debt form

What are the next steps?

So that’s the basics about a Deed of Assignment of Debt. But what does this mean for you? 

If your creditor passes one of your debts onto a third party company or debt collection agency, it will be officially noted that this new company is now responsible for collection .

You will be able to see this change on your credit report , and any defaults will also be registered in their name too. 

While it certainly adds another layer of confusion to proceedings and you may be unsure of what’s going on when you find out about a deed of assignment of debt, it can occasionally be a bit of a blessing in disguise. 

You may find it much easier dealing with the new company, as they could be more flexible when it comes to discussing interest and additional charges.

There is also the likelihood that these companies actually specialise in collecting debts , and so know how to approach you as the customer with more tact and delicacy than the original creditor.

Is there something missing? We’re all ears and eager to improve. Send us a message and let us know how we can make our article more useful for you.

You can email us directly at [email protected] to share your feedback.

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Deed of Assignment and the Notice of Assignment -What is the Difference?

In this article, Richard Gray barrister takes a brief look at the differences between a Deed of Assignment and a Notice of Assignment and the effect of the assignment on the contracting party

At the end of 2020, Elysium Law were instructed to act for a significant number of clients in relation to claims made by a company known as Felicitas Solutions Ltd (an Isle of Man Company) for recovery of loans which had been assigned out of various trust companies following loan planning entered into by various employees/contractors.

Following our detailed response, as to which please see the article on our website written by my colleague Ruby Keeler-Williams , the threatened litigation by way of debt claims seem to disappear. It is important to note that the original loans had been assigned by various Trustees to Felicitas, by reason of which, Felicitas stood in the shoes of the original creditor, which allowed the threatened action to be pursued.

After a period of inertia, Our Clients, as well as others, have been served with demand letters by a new assignee known as West 28 th Street Ltd . Accompanying the demand letters is a Notice of Assignment, by reason of which the Assignee has informed the alleged debtor of the Assignees right to enforce the debt.

Following two conferences we held last week and a number of phone call enquiries which we have received, we have been asked to comment upon the purport and effect of the Notice of Assignment, which the alleged debtors have received. Questions such as what does this mean (relating to the content) but more importantly is the ‘Notice’ valid?

Here I want to look briefly at the differences between the two documents.

There is no need for payment to make the assignment valid and therefore it is normally created by Deed.

 The creation of a legal assignment is governed by Section 136 of the Law of Property Act 1925:

136 Legal assignments of things in action.

(1)Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, is effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice—

(a) the legal right to such debt or thing in action;

(b) all legal and other remedies for the same; and

(c) the power to give a good discharge for the same without the concurrence of the assignor:

Some of the basic requirements for a legal assignment are;

• The assignment must not be subject to conditions.
• The rights to be assigned must not relate to only part of a debt, or other legal chose in action.
• The assignment must be in writing and signed by the assignor.
• The other party or parties to the agreement must be given notice of the assignment.

Notice of assignment

To create a legal assignment, section 136 requires that express notice in writing of the assignment must be given to the other contracting party (the debtor).

Notice must be in writing

Section 136 of the LPA 1925 requires “express notice in writing” to be given to the other original contracting party (or parties).

 Must the notice take any particular form?

The short answer is no. Other than the requirement that it is in writing, there is no prescribed form for the notice of assignment or its contents. However, common sense suggests that the notice must clearly identify the agreement concerned.

Can we  challenge the Notice?

No. You can challenge the validity of the assignment assignment by ‘attacking the Deed, which must conform with Section 136. In this specific case, the Notice sent by West 28 th Street in itself is valid. Clearly, any claims made must be effected by a compliant Deed and it is that which will require detailed consideration before any right to claim under the alleged debt is considered.

Can I demand sight of the assignment agreement

On receiving a notice of assignment, you may seek to satisfy yourself that the assignment has in fact taken place. The Court of Appeal has confirmed that this is a valid concern, but that does not give an automatic right to require sight of the assignment agreement.

In Van Lynn Developments Limited v Pelias Construction Co [1969]1QB 607  Lord  Denning said:

“After receiving the notice, the debtor will be entitled, of course, to require a sight of the assignment so as to be satisfied that it is valid…”

The Court of Appeal subsequently confirmed this  stating the contracting party is entitled to satisfy itself that a valid absolute assignment has taken place, so that it can be confident the assignee can give it a good discharge of its obligations

The important document is the Deed of Assignment, which sets out the rights assigned by the Assignor. The Notice of Assignment is simply a communication that there has been an assignment. The deed is governed by Section 136 of the LP 1925. It should be possible to obtain a copy of the Deed prior to any action taken in respect of it.

For more information on the claims by West 28 th Street or if advice is needed on the drafting of a Deed, then please call us on 0151-328-1968 or visit www.elysium-law.com .

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Deed of Assignment or Deed of Novation: Key Differences and Legal Implications of Novation and Assignment Contracts

Novation and assignment stand out as pivotal processes for the transfer of contractual rights and obligations. These legal concepts allow a party to the contract to adapt to changing circumstances, ensuring that business arrangements remain relevant and effective. This article explores the nuances of novation and assignment, shedding light on their distinct legal implications, procedures, and practical applications. Whether you’re a business owner navigating the transfer of service contracts, or an individual looking to understand your rights and responsibilities in a contractual relationship, or a key stakeholder in a construction contract, this guide will equip you with the essential knowledge to navigate these complex legal processes.

Table of Contents

• What is a Deed of Novation? 
• What is a Deed of Assignment? 

Key Differences Between Novation and Assignment Deeds

Need a deed of novation or assignment key factors to consider, selecting the right assignment clause for your contract – helping you make the right choice, what is a deed of novation.

Novation is a legal process that allows a new party to a contract to take the place of an original party in a contract, thereby transferring both the responsibilities and benefits under the contract to a third party. In common law, transferring contractual obligations through novation requires the agreement of all original parties involved in the contract, as well as the new party. This is because novation effectively terminates the original contract and establishes a new one.

A novation clause typically specifies that a contract cannot be novated without the written consent of the current parties. The inclusion of such a clause aims to preclude the possibility of novation based on verbal consent or inferred from the actions of a continuing party. Nevertheless, courts will assess the actual events that transpired, and a novation clause may not always be enforceable. It’s possible for a novation clause to allow for future novation by one party acting alone to a party of their choosing. Courts will enforce a novation carried out in this manner if it is sanctioned by the correct interpretation of the original contract.

Novation is frequently encountered in business and contract law, offering a means for parties to transfer their contractual rights and duties to another, which can be useful if the original party cannot meet their obligations or wishes to transfer their contract rights. For novation to occur, there must be unanimous consent for the substitution of the new party for the original one, necessitating a three-way agreement among the original party, the new party, and the remaining contract party. Moreover, the novation agreement must be documented in writing and signed by all involved parties. Understanding novation is essential in the realms of contracts and business dealings, as it provides a way for parties to delegate their contractual rights and responsibilities while freeing themselves from the original agreement.

What is a Deed of Assignment?

A deed of assignment is a legal document that facilitates the transfer of a specific right or benefit from one party (the assignor) to another (the assignee). This process allows the assignee to step into the assignor’s position, taking over both the rights and obligations under the original contract. In construction, this might occur when a main contractor assigns rights under a subcontract to the employer, allowing the employer to enforce specific subcontractor duties directly if the contractor fails.

Key aspects of an assignment include:

• Continuation of the Original Contract: The initial agreement remains valid and enforceable, despite the transfer of rights or benefits.
• Assumption of Rights and Obligations: The assignee assumes the role of the assignor, adopting all associated rights and responsibilities as outlined in the original contract.
• Requirement for Written Form: The assignment must be documented in writing, signed by the assignor, and officially communicated to the obligor (the party obligated under the contract).
• Subject to Terms and Law: The ability to assign rights or benefits is governed by the specific terms of the contract and relevant legal statutes.

At common law, parties generally have the right to assign their contractual rights without needing consent from the other party involved in the contract. However, this does not apply if the rights are inherently personal or if the contract includes an assignment clause that restricts or modifies this general right. Many contracts contain a provision requiring the consent of the other party for an assignment to occur, ensuring that rights are not transferred without the other party’s knowledge.

Once an assignment of rights is made, the assignee gains the right to benefit from the contract and can initiate legal proceedings to enforce these rights. This enforcement can be done either independently or alongside the assignor, depending on whether the assignment is legal or equitable. It’s important to note that while rights under the contract can be assigned, the contractual obligations or burdens cannot be transferred in this manner. Therefore, the assignor remains liable for any obligations under the contract that are not yet fulfilled at the time of the assignment.

Choosing Between Assignment and Novation in a Construction Contract

Choosing between a deed of novation and an assignment agreement depends on the specific circumstances and objectives of the parties involved in a contract. Both options serve to transfer rights and obligations but in fundamentally different ways, each with its own legal implications, risks, and benefits. Understanding these differences and considering various factors can help in making an informed decision that aligns with your goals.

The choice between assignment and novation in a construction project scenario, where, for instance, an employer wishes to engage a subcontractor directly due to loss of confidence in the main contractor, hinges on several factors. These are:

• Nature of the Contract:  The type of contract you’re dealing with (e.g., service, sales) can influence which option is more suitable. For instance, novation might be preferred for service contracts where obligations are personal and specific to the original parties.
• Parties Involved: Consent is a key factor. Novation requires the agreement of all original and new parties, making it a viable option only when such consent is attainable. Assignment might be more feasible if obtaining consent from all parties poses a challenge.
• Complexity of the Transaction: For transactions involving multiple parties and obligations, novation could be more appropriate as it ensures a clean transfer of all rights and obligations. Assignment might leave the original party with ongoing responsibilities.
• Time and Cost: Consider the practical aspects, such as the time and financial cost associated with each option. Novation typically involves more complex legal processes and might be more time-consuming and costly than an assignment.

If the intention is merely to transfer the rights of the subcontractor’s work to the employer without altering the subcontractor’s obligations under a contract, an assignment might suffice. However, if the goal is to completely transfer the main contractor’s contractual role and obligations to the employer or another entity, novation would be necessary, ensuring that all parties consent to this new arrangement and the original contractor is released from their obligations.

The legal interpretations and court decisions highlight the importance of the document’s substance over its label. Even if a document is titled a “Deed of Assignment,” it could function as a novation if it transfers obligations and responsibilities and involves the consent of all parties. The key is to clearly understand and define the objective behind changing the contractual relationships and to use a deed — assignment or novation — that best achieves the desired legal and practical outcomes, ensuring the continuity and successful completion of the construction project.

Understanding the distinction between assignment deeds and novation deeds is crucial for anyone involved in contractual agreements. Novation offers a clean slate by transferring both rights and obligations to a new party, requiring the consent of all involved. Assignment, conversely, allows for the transfer of contractual benefits without altering the original contract’s obligations. Each method serves different strategic purposes, from simplifying transitions to preserving original contractual duties. The choice between novation and assignment hinges on specific legal, financial, and practical considerations unique to each situation. At PBL Law Group, we specialise in providing comprehensive legal advice and support in contract law. Our team is dedicated to helping clients understand their options and make informed decisions that align with their legal and business objectives. Let’s discuss!

Authored By Raea Khan

Director Lawyer, PBL Law Group

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Assignment of loan | Practical Law

Assignment of loan

Practical law uk standard document 9-500-4767  (approx. 31 pages).

English law assignments of part of a debt: Practical considerations

United Kingdom |  Publication |  December 2019

Enforcing partially assigned debts against the debtor

The increase of supply chain finance has driven an increased interest in parties considering the sale and purchase of parts of debts (as opposed to purchasing debts in their entirety).

While under English law part of a debt can be assigned, there is a general requirement that the relevant assignee joins the assignor to any proceedings against the debtor, which potentially impedes the assignee’s ability to enforce against the debtor efficiently.

This note considers whether this requirement may be dispensed with in certain circumstances.

Can you assign part of a debt?

Under English law, the beneficial ownership of part of a debt can be assigned, although the legal ownership cannot. 1  This means that an assignment of part of a debt will take effect as an equitable assignment instead of a legal assignment.

Joining the assignor to proceedings against the debtor

While both equitable and legal assignments are capable of removing the assigned asset from the insolvency estate of the assignor, failure to obtain a legal assignment and relying solely on an equitable assignment may require the assignee to join the relevant assignor as a party to any enforcement action against the debtor.

An assignee of part of a debt will want to be able to sue a debtor in its own name and, if it is required to join the assignor to proceedings against the debtor, this could add additional costs and delays if the assignor was unwilling to cooperate. 2

Kapoor v National Westminster Bank plc

English courts have, in recent years, been pragmatic in allowing an assignee of part of a debt to sue the debtor in its own name without the cooperation of the assignor.

In Charnesh Kapoor v National Westminster Bank plc, Kian Seng Tan 3 the court held that an equitable assignee of part of a debt is entitled in its own right and name to bring proceedings for the assigned debt. The equitable assignee will usually be required to join the assignor to the proceedings in order to ensure that the debtor is not exposed to double recovery, but the requirement is a procedural one that can be dispensed with by the court.

The reason for the requirement that an equitable assignee joins the assignor to proceedings against the debtor is not that the assignee has no right which it can assert independently, but that the debtor ought to be protected from the possibility of any further claim by the assignor who should therefore be bound by the judgment.

Application of Kapoor

It is a common feature of supply chain finance transactions that the assigned debt (or part of the debt) is supported by an independent payment undertaking. Such independent payment undertaking makes it clear that the debtor cannot raise defences and that it is required to pay the relevant debt (or part of a debt) without set-off or counterclaim. In respect of an assignee of part of an independent payment undertaking which is not disputed and has itself been equitably assigned to the assignee, we believe that there are good grounds that an English court would accept that the assignee is allowed to pursue an action directly against the debtor without needing the assignor to be joined, as this is likely to be a matter of procedure only, not substance.

This analysis is limited to English law and does not consider the laws of any other jurisdiction.

Notwithstanding the helpful clarifications summarised in Kapoor, as many receivables financing transactions involve a number of cross-border elements, assignees should continue to consider the effect of the laws (and, potentially court procedures) of any other relevant jurisdictions on the assignment of part of a debt even where the sale of such partial debt is completed under English law.

Legal title cannot be assigned in respect of part of a debt. A partial assignment would not satisfy the requirements for a legal assignment of section 136 of the Law of Property Act 1925.

If an assignor does not consent to being joined as a plaintiff in proceedings against the debtor it would be necessary to join the assignor as a co-defendant. However, where an assignor has gone into administration or liquidation, there may be a statutory prohibition on joining such assignor as a co-defendant (without the leave of the court or in certain circumstances the consent of the administrator).

[2011] EWCA Civ 1083

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Assigning debts and other contractual claims - not as easy as first thought

Harking back to law school, we had a thirst for new black letter law. Section 136 of the Law of the Property Act 1925 kindly obliged. This lays down the conditions which need to be satisfied for an effective legal assignment of a chose in action (such as a debt). We won’t bore you with the detail, but suffice to say that what’s important is that a legal assignment must be in writing and signed by the assignor, must be absolute (i.e. no conditions attached) and crucially that written notice of the assignment must be given to the debtor.

When assigning debts, it’s worth remembering that you can’t legally assign part of a debt – any attempt to do so will take effect as an equitable assignment. The main practical difference between a legal and an equitable assignment is that the assignor will need to be joined in any legal proceedings in relation to the assigned debt (e.g. an attempt to recover that part of the debt).

Recent cases which tell another story

Why bother telling you the above?  Aside from our delight in remembering the joys of debating the merits of legal and equitable assignments (ehem), it’s worth revisiting our textbooks in the context of three recent cases. Although at first blush the statutory conditions for a legal assignment seem quite straightforward, attempts to assign contractual claims such as debts continue to throw up legal disputes:

• In  Sumitomo Mitsui Banking Corp Europe Ltd v Euler Hermes Europe SA (NV) [2019] EWHC 2250 (Comm),  the High Court held that a performance bond issued under a construction contract was not effectively assigned despite the surety acknowledging a notice of assignment of the bond. Sadly, the notice of assignment failed to meet the requirements under the bond instrument that the assignee confirm its acceptance of a provision in the bond that required the employer to repay the surety in the event of an overpayment. This case highlights the importance of ensuring any purported assignment meets any conditions stipulated in the underlying documents.
• In  Promontoria (Henrico) Ltd v Melton [2019] EWHC 2243 (Ch) (26 June 2019) , the High Court held that an assignment of a facility agreement and legal charges was valid, even though the debt assigned had to be identified by considering external evidence. The deed of assignment in question listed the assets subject to assignment, but was illegible to the extent that the debtor’s name could not be deciphered. The court got comfortable that there had been an effective assignment, given the following factors: (i) the lender had notified the borrower of its intention to assign the loan to the assignee; (ii) following the assignment, the lender had made no demand for repayment; (iii) a manager of the assignee had given a statement that the loan had been assigned and the borrower had accepted in evidence that he was aware of the assignment. Fortunately for the assignee, a second notice of assignment - which was invalid because it contained an incorrect date of assignment - did not invalidate the earlier assignment, which was found to be effective. The court took a practical and commercial view of the circumstances, although we recommend ensuring that your assignment documents clearly reflect what the parties intend!
• Finally, in Nicoll v Promontoria (Ram 2) Ltd [2019] EWHC 2410 (Ch),  the High Court held that a notice of assignment of a debt given to a debtor was valid, even though the effective date of assignment stated in the notice could not be verified by the debtor. The case concerned a debt assigned by the Co-op Bank to Promontoria and a joint notice given by assignor and assignee to the debtor that the debt had been assigned “on and with effect from 29 July 2016”. A subsequent statutory demand served by Promontoria on the debtor for the outstanding sums was disputed on the basis that the notice of assignment was invalid because it contained an incorrect date of assignment. Whilst accepting that the documentation was incapable of verifying with certainty the date of assignment, the Court held that the joint notice clearly showed that both parties had agreed that an assignment had taken place and was valid. This decision suggests that mistakes as to the date of assignment in a notice of assignment may not necessarily be fatal, if it is otherwise clear that the debt has been assigned.

The conclusion from the above? Maybe it’s not quite as easy as first thought to get an assignment right. Make sure you follow all of the conditions for a legal assignment according to the underlying contract and ensure your assignment documentation is clear.

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Deed of Assignment of Debt: Key Insights & Expert Tips

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Understanding debt can feel overwhelming. There’s a lot of legal stuff involved, like figuring out a ‘Deed of Assignment of Debt.’ Then, there’s the challenge of picking the right debt collection agency and finding the best solutions for your debt. This article is here to help clear up these important points.

With a focus on legal considerations, the importance of transparency, and the impact of debt assignment on your credit rating, we delve into expert tips and practical advice to empower you with the knowledge needed to manage and overcome debt. So stay tuned for the details.

Table of Contents

The Basics of a Deed of Assignment of Debt

Imagine one day, you receive a letter. It’s not from the company you owe money to but someone entirely new, demanding payment. This could very well be your introduction to a ‘Deed of Assignment of Debt.’

In a situation where you owe money to a creditor and your account falls into arrears, the creditor may not be able to claim it back. In this case, they may decide to ‘assign’ your debt.

Now, another company or a debt collection agency holds the reins to your debt. What does this mean for you? Simply put, your repayments now have a new destination.

So, what exactly is a deed of assignment of debt? This is a type of notice that informs you that you now owe money to a debt collection agency or a different type of collection service instead of your original creditor. Simply said, a deed of assignment of debt alerts you that the ownership of your debt has been transferred to a new party.

This document is important as it is required to sell or transfer the right to recover a debt. Without it, any company cannot recover money from you. They need a written transfer document for this.

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Different Types of Assignment of Debt

Not all assignments are created equal. There are two main types, and understanding the difference between them could be more beneficial than you think. So here are the two types of assignment of debt:

According to the Law of Property Act 1925, when your debt is legally assigned to a new owner, they get the full package – the right to collect the debt and, if necessary, take legal action to ensure you pay up.

Equitable assignment doesn’t pack quite the same punch as its legal counterpart. Here, only the right to receive your payments is transferred. The original creditor keeps their legal rights, including the option to sue if payments aren’t made. So, if the new holder of your debt wants to take legal action, they need to get the original creditor involved.

How a Deed of Assignment of Debt Works

Diving into the realm of debt assignment, we unravel the process that can significantly impact both creditors and debtors. Let’s take a closer look, shall we?

First off, your credit agreement is not just another document to sign and forget. Hidden within its clauses could be the power for your creditor to pass your debt to someone else without even asking you. So, when it comes to a Deed of Assignment of Debt, the credit agreement is important.

Here’s where the action begins. Once your creditor decides to assign your debt, a series of steps unfolds:

When debts change hands, it cannot be done just by word of mouth and by the exchange of certain documents. Both parties must sign off on this change. They seal the deal with a Deed of Assignment.

Now, it’s your turn in the spotlight. You’ll receive a notice, making everything crystal clear. This notice isn’t just a courtesy; it’s a cornerstone of the whole process. If this step is missed or mishandled, the entire assignment might be in jeopardy.

Here’s where things get personal. The transfer of your debt can show up on your credit report. This can be a big deal because it might affect your ability to borrow in the future. Think of it as your debt’s new address updating on a very public record, your credit report. How this information is presented could influence your financial journey in significant ways.

This is because many lenders check your credit report before they decide to lend you money. So, once this appears on your credit report, lenders might become hesitant to lend you money. Furthermore, even getting a mortgage may become challenging.

Debt Solutions and Alternatives

Suppose you received a Deed of Assignment of Debt because you failed to make payments to your creditor. Worry not! There are many debt solutions available in the UK for individuals who are struggling with debt. Each of these debt solutions is suitable for different people based on their unique situations. However, some of the most common ones that you can consider taking up include:

• Debt Management Plans (DMPs)
• Individual Voluntary Arrangements (IVAs)
• Debt Relief Orders (DROs)

Some debt solutions enable you to freeze interest until there is an improvement in your financial situation. Whereas other debt solutions help to clear some or all of your debt within a few years.

If you want guidance or advice on which debt solution suits your situation, we recommend you reach out to a debt charity or a debt management company.

Alternatively, feel free to fill out our online form , and our Money Advisor team will guide you through the best course of action.

Deed of Assignment of Debt – The Next Steps

So those are the basic details you should know. But what exactly does this mean for you? In a case where your creditor passes on one of your debts to a third party, such as a debt collection company, this document will officially note that the new company is now responsible for collection.

Even though this situation may seem confusing, in some cases, it may even be a blessing in disguise. Some individuals even find it much easier to deal with a new company instead of their original creditors. This is because they could be more flexible when it comes to negotiating additional charges and interest.

Furthermore, there is also a chance that these companies specialise in the collection of debts. So, they will be much more knowledgeable as to how they should approach you as the customer with more delicacy and tact than your original creditor.

In conclusion, understanding the ins and outs of debt, including the complexities of a Deed of Assignment of Debt, can be challenging. However, by grasping the basics outlined in this article, you’re better equipped to navigate through it.

Now armed with knowledge about debt assignment types, legal implications, and credit impacts, it’s time to take action. If you find yourself facing a Deed of Assignment of Debt, don’t panic. Instead, explore the various debt solutions available, such as Debt Management Plans, Individual Voluntary Arrangements, Debt Relief Orders, or bankruptcy.

Remember, you’re not alone in this journey. Seek guidance from debt charities, management companies, or our dedicated Money Advisor team. Take proactive steps to regain control of your finances and pave the way for a brighter financial future.

So, if you’re ready to tackle your debt head-on and explore your options, reach out for assistance today. Your path to financial freedom starts now.

• A Deed of Assignment of Debt is a crucial legal document that indicates the transfer of debt ownership to a new party, requiring formal notification to the debtor.
• The credit agreement may contain clauses allowing debt assignment without the debtor’s explicit consent, underscoring the importance of thoroughly understanding agreement terms.
• There are two types of debt assignments: legal, granting full rights, including legal action to the new owner, and equitable, transferring only the right to receive payments.
• Effective debt assignment involves a clear process, including notification to the debtor and adherence to legal formalities to ensure the transfer is valid and enforceable.
• Debt assignment can impact a debtor’s credit rating, as it may be recorded in the credit report, influencing future borrowing capabilities.
• Choosing the right debt collection agency involves evaluating their success rates and expertise with similar debts, highlighting the need for a comprehensive credit agreement to protect all parties.
• Legal considerations, such as compliance with the Law of Property Act 1925, are essential to avoid common legal pitfalls and ensure the debt assignment process adheres to the required standards.
• Exploring various debt solutions like debt management plans, IVAs, or bankruptcy offers alternative paths for managing or resolving debt situations.
• Transparency and legal compliance by creditors and collection agencies are crucial for a smooth transition during the debt assignment process.
• Staying informed and seeking professional advice can empower individuals to navigate the complexities of debt assignment confidently.

Yes, formal notification is a crucial step in the debt assignment process. The new creditor is required to inform you within a specific timeframe, making the transfer of debt ownership official and enforceable.

Many credit agreements include clauses that permit the original creditor to assign the debt to another party without needing the debtor’s direct consent. It’s important to thoroughly understand the terms of your credit agreement. What are the differences between legal and equitable debt assignments?

• Legal assignment transfers full rights over the debt, including the ability to take legal action, to the new creditor.
• The equitable assignment only transfers the right to receive payments from the debt without transferring the legal rights to enforce the debt.

Common issues include failing to properly notify the debtor or not adhering to the legal requirements outlined in the Law of Property Act 1925. Understanding your rights can protect you against potential overreach by debt buyers or collection agencies.

Yes, alternatives include debt management plans, Individual Voluntary Arrangements (IVAs), and bankruptcy. Each option has different implications and may be more suitable depending on your financial situation.

Transparency ensures that all parties are fully aware of the terms and conditions of the debt assignment. It fosters trust and helps avoid misunderstandings that could complicate the debt recovery process.

Staying informed about your rights and seeking professional advice can help you navigate the complexities of debt assignment. Understanding the process can turn a potentially daunting situation into a manageable one.

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• Mortgage Claims by Assignee Mortgagees: Evidencing the Right to the Mortgagee’s Remedies

Mortgage Claims by Assignee Mortgagees: Evidencing the Right to the Mortgagee’s Remedies 02 September 2020

It has long been a known problem in mortgage law that s.114 of the Law of Property Act 1925, which automatically transfers the right to the mortgage debt when the mortgage is transferred by deed, does not apply to registered land. That has been clear since at least Paragon Finance Plc v Pender [2005] EWCA Civ 760 by reference to the Land Registration Act 1925. Thus, for registered land, the debt must be assigned separately . Pender, however, also makes clear that the registered proprietor of a legal charge has the right to possession, even if no right to the debt.

Despite these long-standing principles, mortgage cases brought by an assignee of the mortgage often face defences that they  are not  entitled to the relief they have sought. One solution, to produce the deed of assignment, can raise issues about redaction of non-relevant parts, when one deed transfers many mortgages.

Two recent cases discuss these issues. On procedure, the court has considered the more general question of when a party can redact parts of a document which the court is asked to construe on the basis that such parts are irrelevant. On substantive law, the courts have recently considered which documents are necessary to evidence an assignment of a debt secured by mortgage. In this paper, we consider issues of evidence in light of those cases and discuss the practical implications for practitioners, particularly in the context of mortgages.

Production of Documentary Evidence

The first part of this paper looks at redaction of documents in the context of disclosure.

Standard disclosure, under CPR 31, that is the production of documents on which a party relies or which may adversely affect or support a parties case, is an intrinsic part of the way civil ligation operates. Trials are not to be conducted by ambush thus each party must have an adequate opportunity to deal with the other side’s evidence fairly. That said, there are a number of rules of both law and procedure which can operate to prevent the production of relevant documents in a given case; litigation privilege is one obvious example. But what about the redaction of documents adduced as evidence by one party on the ground of confidentiality or irrelevance?

The practice of blanking out parts of documents is not a new one. Practitioners have routinely done so where part of the document is privileged or contains what they consider to be irrelevant material. In  GE Capital v Bankers Trust  [1995] 1 W.L.R. 172, CA, just before the introduction of the Civil Procedure Rules, Hoffmann LJ said:

“It has long been the practice that a party is entitled to seal up or cover up parts of a document which he claims to be irrelevant … In my view, the test for whether on discovery part of a document can be withheld on grounds of irrelevance is simply whether that part is irrelevant. The test for whether part can be withheld on grounds of privilege is simply whether that part is privileged. There is no additional requirement that the part must deal with an entirely different subject-matter from the rest.”

Redaction within the CPR has been discussed in the more recent case of Atos Consulting v Avis Plc [2007] EWHC 323 (TCC). In that case, Ramsey J gave guidance as to the correct judicial approach to be taken where the documents disclosed by one party were redacted and another party, by application, sought to challenge the redactions, either on the ground of lack of privilege or on the ground that the redacted text was relevant. At 37 the following 5 helpful principles as to redaction were outlined:

“(1)  The Court has to consider the evidence produced on the application.

(2)  If the Court is satisfied that the right to withhold inspection of a document is established by the evidence and there are no sufficient grounds for challenging the correctness of that asserted right, the Court will uphold the right.

(3)  If the Court is not satisfied that the right to withhold inspection is established because, for instance, the evidence does not establish a legal right to withhold inspection then the Court will order inspection of the documents.

(4)  If sufficient grounds are shown for challenging the correctness of the asserted right then the Court may order further evidence to be produced on oath or, if there is no other appropriate method of properly deciding whether the right to withhold inspection should be upheld, it may decide to inspect the documents.

(5)  If it decides to inspect then having inspected the documents it may invite representations.”

There is, however, a distinction between application to redaction of the rules which apply when a party is giving disclosure of documents in the ordinary course of litigation, and the separate question of the relevance of redaction in the process of construction of a document which a court has to embark upon when considering the meaning or legal effect of a document. Since the process of construction requires the document as a whole to be considered, the starting point must always be that the entire document should be made available to the court, and any redactions to it on grounds of irrelevance should either be forbidden or, if permitted at all, convincingly justified and kept to an absolute minimum. This situation, where the redacted document needs to be construed, is the precise issue raised in the recent Court of Appeal decision of Hancock v Promontoria (Chestnut) Ltd [2020] EWCA Civ 907.

Hancock v Promontoria (Chestnut) Ltd [2020] EWCA Civ 907

In Hancock, Promontoria Chestnut sought to recover the payment of an undisputed debt of approximately £4.09 million by serving a statutory demand. The debt represented the unsecured balance due under loans originally made to Mr Hancock by Clydesdale Bank PLC. Promontoria Chestnut claimed to have acquired title to the loans by assignment, and in the Statutory Demand, Promontoria Chestnut claimed to be entitled to all of the Bank’s rights by virtue of a deed of assignment.

Proceedings were brought by Mr Hancock to set aside the statutory demand. In them, Mr Hancock sought to challenge Promontoria Chestnut’s title to the debts on the basis that the copy of the Deed of Assignment, which Promontoria Chestnut had put in evidence, had been redacted heavily. Promontoria Chestnut’s solicitor had produced a witness statement explaining the reasons for the redactions, pointing in the main to the irrelevance of the materials redacted to the issue to be determined. However, Mr Hancock argued that the redacted deed of assignment was insufficient to prove Promontoria Chestnut’s title and its corresponding status as a lawful assignee. He said that part of the redactions related to the very clauses which the court was required to construe.

Notwithstanding the arguments of principle advanced, Mr Hancock was unable to produce any credible evidence casting doubt on the title of Promontoria Chestnut to the debts. The Court highlighted the fact that this was not a case where Promontoria Chestnut was required to prove its title to sue Mr Hancock and viewed in context, the redactions to the deed of assignment faded into relative insignificance. It was held that the unredacted parts of the deed were sufficient to show that title to Mr Hancock’s debts indeed had been assigned by the Bank to Promontoria Chestnut.

However, in reaching its decision the Court of Appeal considered the scope of the law on this issue of redaction more generally and the basis on which a party to proceedings could rely on redacted documents.

When Can Redacted Documents be Relied On?

It is settled law that a written contract has to be construed as a whole, in the light of admissible evidence of the relevant background facts (or surrounding circumstances) known to both parties at or before the time when the contract was made, but excluding evidence of prior negotiations. In Wood v Capita Insurance Services Ltd [2017] UKSC 24, [2017] AC 1173, per Lord Hodge JSC (with whose judgment the other members of the Supreme Court agreed) at [10], it was said:

“The court’s task is to ascertain the objective meaning of the language which the parties have chosen to express their agreement. It has long been accepted that this is not a literalist exercise focused solely on a parsing of the wording of the particular clause but that the court must consider the contract as a whole and, depending on the nature, formality and quality of drafting of the contract, give more or less weight to elements of the wider context in reaching its view as to that objective meaning.”

How can such a task can be properly undertaken by the court where part of the document has been redacted so that the court does not have before it the entirety of the relevant contract? Construction of a written document is a matter of law for the court, and questions of relevance require an evaluative judgment which it is for the court, not the solicitor of one of the parties, to perform. Thus, in Hancock , Mr Hancock argued that as a matter of principle, it was no answer to an objection to production of a redacted document only to say that the redactions were certified by an experienced solicitor as being irrelevant to the question which the court has to decide.

However, Mr Hancock’s submission that the court should simply refuse to engage with the construction of the deed of assignment in its redacted form because it is not in a position to construe it as a whole went too far. There could be no such rigid rule which admitted no exceptions. For example, there can be no reasonable objection to redaction, on the grounds of irrelevance, of the details of third party loan assets and title numbers in the schedule to the deed of assignment or the personal details of signatories and/or attesting witnesses. Those details were unlikely to have any bearing on the construction of the operative clauses of the Deed, particularly, in relation to the personal details of signatories and witnesses, where there was no issue in the case concerning its due execution.

However, even in such a clear case  a clear explanation must be provided of the nature and extent of the omissions, and the reasons for making them. Where it was obvious that the provisions in question would on any reasonable view be completely irrelevant to the issue of construction, and if the reasons for taking that view can be clearly and fully articulated by a solicitor acting for the party seeking the redaction, the court will be more inclined to accept that the redaction may be defensible.

In Hancock , it was held that, in general, irrelevance alone cannot be a proper ground for redaction of part of a document which the court is asked to construe, and there must be some additional feature, such as protection of privacy or confidentiality, relied upon to justify the redaction.

Conversely, however, it is seldom, if ever, that it would be appropriate for one party unilaterally to redact provisions in a contractual document which the court is being asked to construe, merely on grounds of confidentiality, where there is no irrelevance in the text redacted. Confidentiality alone cannot be a good reason for redacting an otherwise relevant provision in a contractual document which the court has to construe, and where there are other ways in which problems of that nature can be addressed, by allowing the unredacted document to be available to a ‘confidentiality ring’: the court and a limited number of the parties’ lawyers for example.

Thus, where a redacted document is to be construed, redactions, to be defensible, must be on the grounds of irrelevance and privacy, or irrelevance and confidentiality, not on one of irrelevance, privacy, or confidentiality alone.

The Emmanuel Decision

Just prior to the Court of Appeal decision in Hancock , the High Court (Marcus Smith J) had considered the issue of a redacted assignment of a mortgage in Promontoria (Oak) Limited v Nicholas Michael Emanuel and Nicola Jane Emanuel [2020] EWHC 104 (Ch) (“ Emanuel I ”) but in the different situation of the assignee mortgagee’s claim.

This case involved another company within the Promontoria group, Promontoria (Oak) Limited. Promontoria Oak brought possession proceedings against the defendants, Mr and Mrs Emanuel, owners of residential property in Cornwall charged as security for business loans to Clydesdale Bank. Promontoria sought possession and a money judgment as the assignee of the Bank, relying on a deed of assignment as evidence of the same.

Similar to the position in the Hancock case, in Emanuel, Promontoria put in evidence a significantly redacted version of the assignment, alleging that the redactions contained commercially sensitive material which had no bearing upon the existence and effectiveness of the assignment. Again as in the Hancock case, written notice of the assignment had been given to the Emanuels.

At first instance it was held that Promontoria Oak was entitled to possession of the property and a money judgment was given. The judge at first instance had made his decision with only a redacted version of the deed of assignment, plus some additional evidence, before him. This decision was appealed by the Emanuels on various grounds, including, as ground 1, that, as a matter of evidential rules, the judge had been wrong in exercising his discretion to admit the redacted version of the assignment into evidence. He could not be satisfied, as he had to be to allow the redacted version to be admitted, that the redacted passages were of confidential and irrelevant material because he could not be satisfied on the evidence that they were irrelevant.

This first ground of appeal was successful. The judge at first instance was wrong to admit the redacted assignment deed into evidence. He had failed to have regard to the implications of the evidence that was not before him, and ought to have seen the unredacted assignment. Marcus Smith J said that there was a significant probative difference between the primary evidence that was not before the court and the secondary evidence that was before the court. Even if the judge could conclude on the adduced evidence that the debt had been assigned, it did not follow that evidence not adduced, for example the redacted material, was irrelevant. The evidence not adduced could undermine the conclusion based on the adduced evidence. The judge had failed to pay proper regard to this important factor. 

This was in the context of some uncertainty in the correspondence with the Emanuels as to who, of various Promontoria entities, the assignee for this mortgage was to be. What was said in the correspondence did not sit easily with what the redacted assignment deed showed, and it was unclear that Promontoria Oak had had the mortgage assigned to it via a chain of assignments through the Promontoria entities. In saying that no other documents were needed to prove Promontoria Oaks title to commence proceedings he was simply wrong. He was thus wrong to conclude that the redacted material was irrelevant, and thus wrong to conclude that there was sufficient justification for redaction to allow the redacted assignment to be admitted into evidence. Promontoria Oak had not thus done enough to prove its claim.

What did the Court of Appeal in Hancock make of this earlier decision about redaction in Emanuel I? Since there was a pending application for permission to appeal in Emanuel I, it limited its comments. It did however make three observations.

First, it was noted that the High Court in Emanuel I had rejected grounds 2 and 3, that the redacted deed if admitted into evidence was not enough to prove Promontoria Oak’s title. Marcus Smith J concluded in Emnauel I  that the trial judge had clearly been entitled, on the redacted assignment adduced before him, to reach the conclusion that the mortgage and debt had been assigned to Promontoria Oak. Nevertheless, the appeal succeeded on ground 1, that there should have been no admission of the redacted assignment into evidence, as the trial judge’s decision to permit Promontoria Oak to rely on the redacted deed “was so flawed that it must be set aside”.

Secondly, there are significant differences between the facts in the Emanuel case and that of Hancock. Promontoria Oak had to establish its title to sue, as the claimant in Part 55 proceedings for possession and a money judgment. By contrast, Mr Hancock was seeking to set aside a statutory demand, and the burden was on him to show the existence of a substantial dispute. In addition, in Emanuel I, unlike in Hancock , there was little evidence from Promontoria Oak’s solicitors to explain the commercial background to the assignment, reasons for the redactions, and informing the court that he had inspected an unredacted version of the assignment so as to verify it’s irrelevance to the issues in dispute as there was in Hancock.

Finally, the parties to the litigation and the assignment relied upon in the two cases were of course different, though the Court of Appeal in Hancock noted that the redactions appeared to be rather similar.

In light of these key differences, the outcome of any Emmanuel I appeal is far from a forgone conclusion. Indeed the tone of the Court of Appeal’s commentary in Hancock does not suggest that those particular Justices of Appeal at least agreed with Marcus Smith J. It appears that they might happily have concluded that it was enough that the redacted assignment proved Promontoria Oak’s title. That does seem a likely more practical outcome. The Emanuels’ appeals do appear likely to be simply a delaying tactic.

Evidencing Assignment

A further aspect of the Hancock case related to the effect in law of the notice of the assignment from the Bank to Promontoria Chestnut, given to Mr Hancock. Section 136 of the Law of Property Act 1925 (“ LPA 1925 ”) provides that an absolute assignment by writing of any debt or thing in action, of which express notice in writing is given to the debtor, is effectual in law to pass and transfer the legal right to the debt, all legal and other remedies and the power to give a good discharge without the concurrence of the assignor.

Thus, in Hancock , if the deed of assignment did assign the benefit of Mr Hancock’s debts to the Bank to Promontoria Chestnut, then the giving of express written notice of that assignment to Mr Hancock would transfer the legal title to the debts, together with all remedies for them. There was no evidence in that case that the Bank had ever disputed the validity of the assignment to Promontoria Chestnut or that Mr Hancock had ever asked the Bank to confirm that it no longer had any claims against him in respect of the debts. Mr Hancock would be fully protected by section 136 if he were to make payment to Promontoria Chestnut because the effect of s.136 was to prevent the Bank making a separate claim for the debt. Because of s.136, Promontoria Chestnut could give good receipt for any payments of his debt that Mr Hancock made. In the context of his application to set aside Promontoria Chestnut’s statutory demand, Mr Hancock’s assertion that the debt was disputed on substantial grounds had a correspondingly hollow ring.

The operation of s.136 LPA 1925, and the contrast of its role in assignment of a debt to the role of registration of an assignment of a charge in passing a mortgagee’s proprietary rights, has also been given recent consideration by the High Court in yet another piece of Promontoria litigation, Promontoria (Oak) Limited v Nicholas Michael Emanuel and Nicola Jane Emanuel [2020] EWHC 563 (Ch) (“ Emanuel II ”).

In a hearing of the order to be made given the Emmanuel I decision, Promontoria Oak successfully argued that the first instance orders for possession and a money judgment should be upheld, despite its inability to rely on the redacted deed of assignment, but on the alternative ground that it had title to sue and recover possession in its capacity as registered proprietor of the legal charge granted by the Emanuels over their property.

Marcus Smith J agreed. He held that as the registered proprietor of charge on property, Promontoria Oak had title and therefore standing to claim possession. The claim based on the proprietary interest succeeded simply because of the company's registration of its assigned mortgage pursuant to the Land Registration Act 2002 (“ LRA 2002 ”). This is simply the Paragon Finance Plc v Pender [2005] EWCA Civ 760 point: the right to possession goes with registration of the legal owner of a legal charge.

What about the money claim? Under s.114 LPA 1925 a deed purporting to transfer a mortgage carries with it a right to sue for the mortgage money or any unpaid part of it. Yet s.114 does not apply to registered land. One must thus make a distinction between the remedies of an assignee of a mortgagee’s rights in its guise as registered proprietor, and reliance on the deed of assignment. Thus Promontoria Oak could not rely on the deed of assignment and s.136 LPA 1925 because there was no evidence as to the deed in evidence before the court. However it could succeed on its possession claim as registered proprietor of the charge over the Emanuels’ land.

Moreover, Marcus Smith J concluded, though without much detail in reasoning, that ‘by analogy with section 114’ and pursuant to s.51 LRA 2002, Promontoria Oak had a right to claim any outstanding debt as the holder of the proprietary interest, even though it could not rely on the deed of assignment to show assignment of the right to the debt. This appears to be a strengthening of the position. Post Paragon Finance it appeared that the debt had to be assigned separately in cases of registered land if a money claim was to succeed. Nevertheless the minimal reasoning on this issue in Emanuel II should be noted. Marcus Smith J made reference to s.51 LR 2002. However, unlike s.114 LPA 1925, s.51 LRA 2002 does not explicitly refer to the transfer of the right to sue.

This judgment in Emanuel II , however, is also subject to an outstanding application for permission to appeal. If permission is given, it will be useful to see what the Court of Appeal makes of the long vexed question of assignment of the mortgage debt and whether it is a result of registeration as legal owner of a mortgage despite the lack of application of the useful machinery of s.114 of the 1925 Act. If there is no equivalent of s.114, then the registered proprietor of a mortgage, who took as assignee of the charge, can require the debt secured, plus interest and costs, to be paid to it as a condition of redemption, since that is inherent in a mortgage. Yet that assignee may have to account to the original lender, and, subject to the decision in Emanuel II , may not be able to sue for the debt. An odd position.

Pending any such appeal, Emanuel II is a useful case outlining the law under the 2002 Act and what registration as proprietor of a charge necessarily carries with it. The result of the findings made by the court was that Promontoria Oak effectively sidestepped the issues concerning its redacted documents and achieved its aims via a different route.

The Practicalities

What evidence to adduce?

When a assignee of a mortgage is claiming possession, or the other clear proprietary remedies, sale or the appointment of a receiver, it need only plead its registered title to the charge and that is sufficient to establish its right. That has long been the case, since the decision in Paragon Finance v Pender . That is so even if its registration is a mistake, unless and until that registration is unwound by a claim for rectification of the Land Register.

What if a claim for a money judgment is sought? Though the common current practice is always to seek a money judgment with a possession claim, since the registered mortgagee is entitled to the debt, interest and costs, out of the proceeds of its sale, a money judgment might only be needed if a shortfall is feared, or clarity as to what is owed is sought before sale.

However, if a money judgment is sought, at present at least, pending any appeal of Emanuel II , registration as mortgagee it appears should suffice. By s.51 of the LRA 2002, any assignee once registered is entitled to make a claim for the debt.

When to redact?

What if an assignment of a mortgage is to be produced, for example if the mortgage is not registered, or if the Emanuel II decision is overturned? What should practice be on redaction?

Where documents are redacted it is important for the other side to be able to understand the basis for it, and for the disclosing party to provide an explanation. A witness statement ought to be produced explaining the background to the redacted document, reasons for the redactions and informing the court that the complete version had inspected so as to verify it’s irrelevance to the issues in dispute. It should be prepared in quite some detail, and redactions kept to a minimum. Thus, for example, in Hancock the redactions were said to be far more extensive than needed and the evidence provided by Promontoria Chestnut’s solicitor would have been of greater assistance to the court if he had condescended to greater detail about the specific reasons for particular redactions.

As for the redactions themselves, where part of a document is irrelevant but not confidential, then it might be simpler to disclose it in its entirety. Where the issue is one of confidentiality however, then the issue of redaction arises. If the document can be separated into distinct parts, where one is confidential and the other isn’t, it may be a straightforward process. For example, if a document attaches board minutes or a schedule of third-party transactions which are irrelevant to the litigation.

In some cases there will be real issues about the admissibility of a redacted version. In such cases, another approach will be needed, for example the use of a confidentiality ring within which the document could be made available in its unredacted form to the court and/or a limited number of lawyers on each side may offer a practical solution. Another approach might be for the parties to agree for the judge alone to see the document in its unredacted form.

Cecily Crampin

Tricia hemans.

2 September 2020

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Deed of Assignment (for Intellectual Property)

In the realm of intellectual property, a Deed of Assignment is a formal legal document used to transfer all rights, title, and interest in intellectual property from the assignor (original owner) to the assignee (new owner). This is crucial for the correct transfer of patents, copyrights, trademarks, and other IP rights. The deed typically requires specific legal formalities, sometimes notarization, to ensure it is legally enforceable.

To be legally effective a deed of assignment must contain:

• Title of the Document : It should clearly be labeled as a "Deed of Assignment" to identify the nature of the document.
• Date : The date on which the deed is executed should be clearly mentioned.
• Parties Involved : Full names and addresses of both the assignor (the party transferring the rights) and the assignee (the party receiving the rights). This identifies the parties to the agreement.
• Recitals : This section provides the background of the transaction. It typically includes details about the ownership of the assignor and the intention behind the assignment.
• Definition and Interpretation : Any terms used within the deed that have specific meanings should be clearly defined in this section.
• Description of the Property or Rights : A detailed description of the property or rights being assigned. For intellectual property, this would include details like patent numbers, trademark registrations , or descriptions of the copyrighted material.
• Terms of Assignment : This should include the extent of the rights being transferred, any conditions or limitations on the assignment, and any obligations the assignor or assignee must fulfill as part of the agreement.
• Warranties and Representations : The assignor typically makes certain warranties regarding their ownership of the property and the absence of encumbrances or third-party claims against it.
• Governing Law : The deed should specify which jurisdiction's laws govern the interpretation and enforcement of the agreement.
• Execution and Witnesses : The deed must be signed by both parties, and depending on jurisdictional requirements, it may also need to be witnessed and possibly notarized.
• Schedules or Annexures : If there are detailed lists or descriptions (like a list of patent numbers or property descriptions), these are often attached as schedules to the main body of the deed.

Letter of Assignment (for Trademarks and Patents)

This is a less formal document compared to the Deed of Assignment and is often used to record the assignment of rights or licensing of intellectual property on a temporary or limited basis. While it can outline the terms of the assignment, it may not be sufficient for the full transfer of legal title of IP rights. It's more commonly used in situations like assigning the rights to use a copyrighted work or a trademark license.

For example, company X allows company Y to use their trademark for specific products in a specific country for a specific period.  

At the same time, company X can use a Letter of Assignment to transfer a trademark to someone. In this case, it will be similar to the Deed of Assignment. 

Intellectual Property Sales Agreement

An IP Sales Agreement is a detailed contract that stipulates the terms and conditions of the sale of intellectual property. It covers aspects such as the specific rights being sold, payment terms, warranties regarding the ownership and validity of the IP, and any limitations or conditions on the use of the IP. This document is essential in transactions involving the sale of IP assets.

However, clients usually prefer to keep this document confidential and prepare special deeds of assignment or letter of assignment for different countries.

IP Transfer Declaration

In the context of intellectual property, a Declaration is often used to assert ownership or the originality of an IP asset. For example, inventors may use declarations in patent applications to declare their invention is original, or authors may use it to assert copyright ownership. It's a formal statement, sometimes required by IP offices or courts.

When assigning a trademark, the Declaration can be a valid document to function as a proof of the transfer. For example, a director of company X declares that the company had sold its Intellectual Property to company Y. 

Merger Document

When companies or entities with significant IP assets merge, an IP Merger Document is used. This document outlines how the intellectual property owned by the merging entities will be combined or managed. It includes details about the transfer, integration, or handling of patents, copyrights, trademarks, and any other intellectual property affected by the merger.

In all these cases, the precise drafting of documents is critical to ensure that IP rights are adequately protected and transferred. Legal advice is often necessary to navigate the complexities of intellectual property laws.

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Deed Of Assignment for sale of a debt

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