A Study on the Principle of Requisite for Setting up Assignment of Nominative Claim against Obligor - Including comparative legal review -
Authors: Lee Jieun ,   Korean Civil Law Association
Published: July 2024

An assignment of claim refers to a contract to transfer a claim while maintaining identity of the claim between an assigner (who is an obligee) and an assignee (who will become a new obligee). In the assignment of a nominative claim, assignee can effectively acquire the claim only by agreement between the assigner and the assignee. Since the obligor may not engage in the assignment of a claim by the obligee, it is unreasonable to impose any disadvantage therefrom on the obligor. Ultimately, as the person who contributes the property is the obligor, each country establishes a system under the legislation to protect obligors who are at risk of double payment due to double assignment of a claim even though there are differences in contents and methods in each country. Specifically, in a country with the bona fide protectionism, such as Germany, the order of superiority between assignees is determined depending on whether the obligor was aware of the senior (first) assignment, while in a country with the principle of requisite for setting up against, such as Japan, the order of superiority between assignees is determined depending on whether the obligor is aware of the assignment of a claim. On the contrary, it seems that the U.S. restatement of contract law focuses on whether the second assignee is worth being protected rather than focusing on obligor by determining the order of superiority depending on whether the second assignee had good faith in making the senior assignment. In recent, France revised its Civil Code to abolish the requisite for setting up against a third party in assigning the claim, and to make assignees determine their order of superiority according to the date on the claim assignment deed, defining the contract on the assignment of claim as a formal contract for that purpose. The requisite for setting up against obligor was also relaxed. For example, notice by the enforcement agency and consent by notarized deed required under the previous law was simplified to a simple notice and consent. Article 450 (1) of the Korean Civil Act stipulates that the assignment of a nominative claim cannot be set up against the obligor, unless the assigner has given notice thereof to obligor or the obligor has consented thereto, and Paragraph (2) of the same Article prescribed that the notice or consent cannot be set up against a third person other than the obligor, unless it is put in writing with a certified fixed date. The legislative proposal to change to bona fide protectionism, like the German Civil Code, is worthy of paying attention, but the principle of requisite for setting up against still has the practical value in that it contributes to safe transaction through protection against the risk of double payment for the obligor and the function of fixing the position of the assignee. And from a realistic perspective, in the current situation where the principle of requisite for setting up against has already been quite widely accepted, it is my opinion that it is more appropriate to consider other systems more suitable for the disclosure of requisite for setting up against, going beyond the recognition of the obligor of notice or consent, which is the current requisite for setting up against between obligor and the third party while maintaining the principle of requisite for setting up against. In this paper, based on a review of the legislative cases of each country, as an improvement to Article 450 of the Korean Civil Act, I am going to look into a method of executing an agreement on assignment of a claim in a written contract similar to that prescribed in the French Civil Code in relation to requisite for setting up against the third party and giving effect to the fixed date given thereto, and a method to request registration of assignment of a claim as a requisite for setting up against the third party in the assignment of a claim while maintaining the notice and consent, the requisite for setting up again