With this entry I begin a series of articles categorized as "scope of factoring (assignment)". This is because the subject of the scope of rights that pass under an assignment from the factor (assignor) to the factor (assignee) is vast and impossible to cover in a single entry. Therefore, below is an outline shaping the topics of the posts that will appear on the Blog over the next month.
The legal effect of an assignment (transfer) under a factoring agreement is the transfer to the factor (assignee) not only of the claim itself (e.g. the gross amount documented by a VAT invoice), but also of the rights associated with it. This is because, according to Article 509 § 2 of the Civil Code, all rights associated with the receivable are transferred to the buyer along with the receivable, in particular the claim for overdue interest.
Among the rights, claims and entitlements that can pass under factoring from the factor (assignor) to the factor (assignee), we can include:
- Interest along with a claim for future interest;
- compensation for recovery costs in the amount of EUR 40 (Article 10(1) of the Law of March 8, 2013 on payment terms in commercial transactions);
- collateral for the receivables covered by the assignment (surety, pledge, registered pledge, mortgage);
- claims for payment of contractual penalties or compensation for improper performance;
- claim to obtain surrogates for the object of performance (Article 477 § 2 of the Civil Code);
- A claim for the debtor to provide information on the subject of performance (Article 546 and Article 354 § 1 of the Civil Code);
- The creditor's right to call on the debtor to perform an obligation (Article 455 of the Civil Code);
- The creditor's right to choose performance in an alternate obligation (Article 365 of the Civil Code);
- The creditor's right to challenge actions done to the detriment of the creditor (Article 527 of the Civil Code);
- The priority of satisfaction from which the claim enjoys in the course of enforcement proceedings (Article 1025 of the Code of Civil Procedure),
- arbitration provision.
Each of the above-mentioned rights, claims and entitlements is characterized by its own peculiarities and needs to be discussed separately, because not every one of them passes under factoring to the factor by virtue of the assignment alone, sometimes it is necessary to make an additional stipulation to this effect in the contract. Also, not all of the above-mentioned rights can be freely shaped within the factoring agreement. Hence, because of the significant differences between the above rights, claims and entitlements, the most important ones will be discussed in the form of separate entries.
