Moveable Transactions (Scotland) Act 2023

Moveable Transactions (Scotland) Act 2023

2023 asp 3

Commentary on Sections

Part 1 – Assignation

Chapter 1 – Assignation of claims, protection of debtors and related matters

Protection of debtors

Section 13 – Performance in good faith where claim assigned subject to condition

77. This section protects debtors who do not know that an assignation document is subject to a condition, or who mistakenly believe the condition has been satisfied. Although section 15(8) and (9) of the Act grants an information-gathering right to debtors in respect of conditions, debtors are not required to be on guard against conditional assignations.

78. Subsection (1) sets out the criteria which must be met in order for the protection in subsection (2) to apply:

(a)

The first criterion is that the assignation is subject to a condition which must be satisfied before the claim transfers,

(b)

The second criterion is that the claim has not transferred and the only reason for this is that the condition has not been satisfied,

(c)

The third criterion is that, despite the claim not having transferred, the debtor performs in good faith to the assignee (perhaps because the assignation has been intimated without the debtor being told of the existence of the condition).

79. Subsection (2) provides that the debtor is discharged from the claim (or part) to the extent of the performance to the assignee. This also extends to co-debtors (see paragraph 65 of these Notes).

80. Subsection (3) applies the rules set out in section 10(3) here too. See paragraph 66 of these Notes.