Assignment ( § 398 German Federal Law Book)

A creditor may also assign his claim to another person by means of a contract (Assignment). It does not necessarily have to involve an existing claim. Future claims may also be assigned.

An assignment contract is not subject to specific formalities, implying that it can also be concluded verbally. However, for evidence purposes a written contract is recommended. Moreover, the debtor is only obliged to pay the new creditor if he has been informed of the assignment in writing or if the present creditor has issued an assignment certificate. A proforma of such an assignment contract can be found under the link „Customer forms“.

As a result of the claim assignment the new creditor takes the place of the former creditor, which means that he takes over any related rights and obligations.

In turn the debtor may confront the new creditor with the same forms of appeal and objections to which he was entitled with regard to the former creditor (e.g. objections due to deficiencies, limitation periods, compliance etc.).