Statutory assignment of a chose in action

A buyer who takes over money owed to the seller, or another contract right, may rely on a written assignment. These Acts set the conditions under which that assignment passes the legal right. See what an anti-assignment clause does and assignment of accounts receivable. This entry covers Ontario, British Columbia and Alberta only; check the rules where you are.

What the Acts say

Ontario’s Conveyancing and Law of Property Act (s. 53), British Columbia’s Law and Equity Act (s. 36) and Alberta’s Judicature Act (s. 20) each describe an absolute assignment in writing, not purporting to be by way of charge only, of a debt or other legal chose in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to receive or claim it. Such an assignment is effectual in law, subject to all equities that would have been entitled to priority over the assignee’s right, to pass the legal right to the debt or chose in action from the date of the notice. Each also passes the legal and other remedies and the power to give a good discharge without the assignor’s concurrence. If the debtor has notice that the assignment is disputed, or of other conflicting claims, the next subsection of each Act lets it call on the claimants to interplead.

What to check

• Whether the assignment is absolute or only by way of charge.
• Whether express written notice reached the debtor, and when.
• Whether the underlying contract has an assignment clause.