This document is a deed of assignment of debt.
An agreement that transfers one party’s rights in a contract but not its obligation or liabilities to a third party is called an assignment.
When advising a party who wishes to assign their rights under an agreement to a third party, it is important to:
- have a clear understanding of the laws relating to assignment; and
- review the initial agreement to consider whether the assignor is entitled to assign their rights. If they are, whether these assignment rights are unfettered or restricted. For example, in many contracts a party is required to obtain the written consent of the third party in order to assign rights created under the contract.
This precedent can be used for the assignment of simple contract debts, specialty debts and judgment debts. It can also be readily adapted to apply to an equitable assignment of part of a debt.
Deed or contract
An assignment of rights does not need to be set out in the form of a deed like this precedent. However, in order for any undertakings in the instrument to be enforceable against the assignor, the assignee will either have to:
- provide valuable consideration to the assignor in which case the assignment of rights can be recorded in a contract; or
- if the assignee does not provide valuable consideration then the assignment must be recorded in a deed.
Notice to the debtor
Notice of the assignment should be given to the debtor and, where the benefit of a guarantee securing payment of the debt is also being assigned, to the guarantor as soon as possible.
Power of attorney
The power of attorney in clause 3 is desirable where:
- part of a debt is being assigned: except in Western Australia, a statutory assignment of part of a debt is not possible with the result that the assignee is unable to sue for the debt in his or her own name; and
- a judgment debt is being assigned: while a statutory assignment of a judgment debt carries with it the right to enforce the judgment debt, it does not, of itself, give the assignee the right to control the proceedings relating to any appeal from the judgment giving rise to the judgment debt. See Gould v Skinner  Qd R 377 at 389.
The stamp duty implications of the assignment should be considered.
- Basic loan agreement
- Guarantee of payment of loan
- Real property mortgage
- General security deed
- Amendment and restatement agreement
- Deed of priority
- Forbearance of debt agreement
- Deed of assignment of debt
- Loan agreement checklist
This document has been authored for AusDocsOnline.com by Elise Margow, Principal, Legally Speaking.
This document is prepared with the assistance of Specialist Editors Geoff Geha, Partner, Clayton Utz and Karen Lee, Principal and Consultant, Legal Know-How.