Assignment of a Right in the Civil Transactions Law and in the Egyptian Civil Code
An obligation may pass from one creditor to another with all its constituents and characteristics: its qualities, its securities and its defences. This is known in law as assignment, and what concerns us here in particular is the assignment of a right, which bears upon personal rights and not upon real rights. In it the creditor agrees with a stranger to assign to him the right he holds against the debtor, the stranger taking the creditor's place in that very right with all its constituents. In such an assignment the creditor is called the assignor, because he assigns to the stranger the right he holds against the debtor; the stranger is called the assignee, because the creditor has assigned his right to him; and the debtor is called the debtor, because the original creditor has assigned the new debt against him.
Article 303 of the Egyptian Civil Code and Article 238 of the Civil Transactions Law provide that "a creditor may assign his right to another person, unless the statutory provisions, the agreement or the nature of the obligation require otherwise; and the debtor's consent is not required for the assignment to be concluded". The article following provides that "a right may be assigned only to the extent that it is capable of attachment".
The assignment of a right creates no new obligation in the debtor's patrimony: it transfers the obligation already established there from the creditor to another creditor, that obligation being a right of the assigning creditor. The obligation itself passes with all its constituents and characteristics, from which it follows that after assignment it remains governed by the same law under which it arose, as to its nature, its quality, its proof, its capacity for assignment and the conditions required for that. Where a statute is issued altering those provisions, it applies to that obligation only within the compass of the mandatory rules of public order it introduces. So the Egyptian Court of Cassation has held in this respect (cassation, 23 December 1967).
The Mejelle defined assignment as "the transfer of a debt from one patrimony to another" (Article 673), and provided that "where the assignor says to his creditor, I have assigned you against so-and-so, and the assignee and the debtor accept, the assignment is concluded". The Review Panel of the Board of Grievances (review judgment 2/T/1 of 1423 in case 128 of 1422, Administrative Circuit) defined it as "the passing of property from the patrimony of the assignor to that of the debtor, such that the assignee has no recourse against the assignor at all where its conditions are met", and held that its validity requires conditions including:
1. That the two rights correspond in kind, in quality, and in being presently due or deferred.
2. That it bear upon a settled debt.
3. That it be for a known sum.
4. That the assignor assign with his consent.
The jurists have laid down that the validity of an assignment requires the assignor's consent, knowledge of the property assigned, correspondence of the two debts, and that the debt debtor be settled in the patrimony of the debtor. So the Commercial Appellate Circuit of the Board of Grievances held in case 1781 of 1428 and case 3339 of 1432.
The elements of an assignment of a right
An assignment of a right is an agreement between the assignor and the assignee to transfer to the latter the assignor's right existing in the patrimony of the assignor's debtor. Its elements are therefore those of any agreement between two parties, and the elements of an agreement are the elements of a contract: consent, object and cause.
One: consent.
It must issue from one holding capacity according to the contract the assignment embodies, and must be free of the defects of will — mistake, fraud, duress and exploitation. Article 303 of the Civil Code, and the Civil Transactions Law likewise, provide that "the assignment is effected without need of the debtor's consent". Article 305 of the Civil Code, and the Civil Transactions Law likewise, provide that "the assignment does not take effect as against the debtor or as against third parties unless the debtor accepts it or is notified of it; and for it to take effect against third parties by the debtor's acceptance, that acceptance must be of established date". It appears from these texts that the assignment is effected by the mutual consent of the assignor and the assignee without need of the consent of the debtor, but does not take effect as against the debtor unless he accepts it or is notified of it, nor as against third parties save from the date of notification to the debtor or from the established date of his acceptance.
Two: the object.
An assignment of a right bears upon personal rights, whatever their object, and not upon real rights, which pass by registration. A personal right creates a relation of obligation giving the creditor a right in the debtor's patrimony, and that right is the object of the assignment. The chief difference between a real and a personal right in this respect is that a real right does not attach to the patrimony of any particular debtor, and so passes and takes effect by agreement between the holder of the right and the person contracting with him. Its taking effect against third parties, however, is achieved not by notifying the agreement to a particular debtor — as in the assignment of a right — but by other procedures.
In principle an assignment of a right may bear upon every right, whatever its object, as the explanatory memorandum to the Egyptian Civil Code provides. Most commonly, however, it bears upon a right to receive a sum of money. Nothing prevents it bearing upon a right to receive the performance of some act — an obligation to do — such as the enjoyment of a leased property under the lessee's right against the lessor, a right that passes by way of assignment of the lease. It makes no difference to a right's capacity for assignment whether it is civil or commercial. It makes no difference either whether the right assigned is presently due, subject to a term, or suspended upon a condition, as with a broker's assignment of his right should the transaction be concluded. Nor is it required that the right be recorded in writing: rights provable only by testimony may be assigned, as may a future right. Negotiable instruments — bills of exchange, promissory notes and cheques — may be assigned, as may shares and bonds.
Although rights are in principle capable of assignment, that principle does not run without limit: three exceptions bear upon it, in which a personal right is incapable of assignment. First: an agreement between creditor and debtor that the right shall not be assignable, by which the creditor is then bound. Second: assignment is barred, without need of any particular agreement, where the right by its nature is inconsistent with the substitution of the creditor, as with obligations in which the person of the contracting party is material — maintenance, a claim for compensation for moral harm before it is quantified, and the borrower's right to use the thing lent. Assignment is not a matter of public order, and so an agreement that a right shall not be assignable is permissible, as the Egyptian courts have held in this respect. Third: a statutory prohibition on assignment, as with rights not capable of attachment. Where a right is not capable of attachment, disposition of it is barred; and where only part of a right is incapable of attachment, its assignment is barred only as to that part.
Three: the cause.
By the cause in an assignment is meant the motive that led the assignor and the assignee to conclude it. The cause of an assignment must meet the conditions required of the cause in a contract, to which we refer.
Withdrawing from an agreement of assignment
An assignment of a right is an agreement binding on its parties, which may be varied only by agreement. The Egyptian Court of Cassation has held that "since the contract is the law of the parties, and may not be rescinded or varied save by agreement of both parties or on the grounds the law lays down, and since the assignment is a contract binding upon both the assignor and the assignee, neither of them may withdraw from it by his unilateral will" (cassation, 9 February 1983).