Assignment of Credit

Assignment of credit – is a contract by which one person (assignor/creditor) transfers to another his rights and actions against a
third person (debtor) in consideration of a price certain in money or its equivalent. (see Art. 1468.)

Warranties of the assignor of credit.

(1) When a creditor assigns his credit, he warrants only the (a) existence and (b) legality of the credit at the perfection of the
contract. He is not even liable for the warranty if the credit had been sold as doubtful.
(2) There is no warranty as to the solvency of the debtor un less it is expressly stipulated or unless the insolvency was already
existing and of public knowledge at the time of the assignment.
If there be any breach of the above warranties, the assignor vendor shall be held answerable therefor.

Liabilities of the assignor of credit.

(1) For violation of the above warranties, the liability o the vendor (assignor) in good faith is limited only to the P rice received
and to the expenses of the contract, and any other legitimate payments by reason of the assignment.

(2) The assignor in bad faith is liable not only for the payment of the price and all expenses, but also for damages. An assignor in
bad faith is one who has knowledge of any of the circumstances mentioned above while an assignor in good faith is one who is
ignorant of them.

It is really a sale. Thus, the subject matter is the credit or right assigned; the consideration is the price paid for the credit or
right; and the consent is the agreement of the parties to the assignment of the credit or right at the agreed price.

It depends. Art. 1630. One who sells an inheritance without enumerating the things of which it is composed, shall only be
answerable for his character as an heir.

It depends. Art. 1626. The debtor who, before having knowledge of the assignment, pays his creditor shall be released from the
obligation.