United Nations Convention on the Assignment of Receivables in International Trade

SECTION II - DEBTOR

1.

Except as otherwise provided in this Convention, an assignment does not, without the consent of the debtor, affect the rights and obligations of the debtor, including the payment terms contained in the original contract.

2.

A payment instruction may change the person, address or account to which the debtor is required to make payment, but may not change:

(a)

The currency of payment specified in the original contract; or

(b)

The State specified in the original contract in which payment is to be made to a State other than that in which the debtor is located.

1.

Notification of the assignment or a payment instruction is effective when received by the debtor if it is in a language that is reasonably expected to

inform the debtor about its contents. It is sufficient if notification of the assignment or a payment instruction is in the language of the original contract.

2.

Notification of the assignment or a payment instruction may relate to receivables arising after notification.

3.

Notification of a subsequent assignment constitutes notification of all prior assignments.

1.

Until the debtor receives notification of the assignment, the debtor is entitled to be discharged by paying in accordance with the original contract.

2.

After the debtor receives notification of the assignment, subject to paragraphs 3 to 8 of this article, the debtor is discharged only by paying the assignee or, if otherwise instructed in the notification of the assignment or subsequently by the assignee in a writing received by the debtor, in accordance with such payment instruction.

3.

If the debtor receives more than one payment instruction relating to a single assignment of the same receivable by the same assignor, the debtor is discharged by paying in accordance with the last payment instruction received from the assignee before payment.

4.

If the debtor receives notification of more than one assignment of the same receivable made by the same assignor, the debtor is discharged by paying in accordance with the first notification received.

5.

If the debtor receives notification of one or more subsequent assignments, the debtor is discharged by paying in accordance with the notification of the last of such subsequent assignments.

6.

If the debtor receives notification of the assignment of a part of or an undivided interest in one or more receivables, the debtor is discharged by paying in accordance with the notification or in accordance with this article as if the debtor had not received the notification. If the debtor pays in accordance with the notification, the debtor is discharged only to the extent of the part or undivided interest paid.

7.

If the debtor receives notification of the assignment from the assignee, the debtor is entitled to request the assignee to provide within a reasonable period of time adequate proof that the assignment from the initial assignor to the initial assignee and any intermediate assignment have been made and, unless the assignee does so, the debtor is discharged by paying in accordance with this article as if the notification from the assignee had not been received. Adequate proof of an assignment includes but is not limited to any writing emanating from the assignor and indicating that the assignment has taken place.

8.

This article does not affect any other ground on which payment by the debtor to the person entitled to payment, to a competent judicial or other authority, or to a public deposit fund discharges the debtor.

1.

In a claim by the assignee against the debtor for payment of the assigned receivable, the debtor may raise against the assignee all defences and rights of set--off arising from the original contract, or any other contract that was part of the same transaction, of which the debtor could avail itself as if the assignment had not been made and such claim were made by the assignor.

2.

The debtor may raise against the assignee any other right of set--off, provided that it was available to the debtor at the time notification of the assignment was received by the debtor.

3.

Notwithstanding paragraphs 1 and 2 of this article, defences and rights of set--off that the debtor may raise pursuant to article 9 or 10 against the assignor for breach of an agreement limiting in any way the assignor's right to make the assignment are not available to the debtor against the assignee.

1.

The debtor may agree with the assignor in a writing signed by the debtor not to raise against the assignee the defences and rights of set--off that it could raise pursuant to article 18. Such an agreement precludes the debtor from raising against the assignee those defences and rights of set--off.

2.

The debtor may not waive defences:

(a)

Arising from fraudulent acts on the part of the assignee; or

(b)

Based on the debtor's incapacity.

3.

Such an agreement may be modified only by an agreement in a writing signed by the debtor. The effect of such a modification as against the assignee is determined by article 20, paragraph 2.

1.

An agreement concluded before notification of the assignment between the assignor and the debtor that affects the assignee's rights is effective as against the assignee, and the assignee acquires corresponding rights.

2.

An agreement concluded after notification of the assignment between the assignor and the debtor that affects the assignee's rights is ineffective as against the assignee unless:

(a)

The assignee consents to it; or

(b)

The receivable is not fully earned by performance and either the modification is provided for in the original contract or, in the context of the original contract, a reasonable assignee would consent to the modification.

3.

Paragraphs 1 and 2 of this article do not affect any right of the assignor or the assignee arising from breach of an agreement between them.

Failure of the assignor to perform the original contract does not entitle the debtor to recover from the assignee a sum paid by the debtor to the assignor or the assignee.

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