Concept and Fundamentals of the Blank Assignment
Die Blank Assignment is a term from German assignment law and describes a special form of assignment of claims, in which the claim to be assigned is not yet or not conclusively individualized at the time of the contract’s conclusion. The blank assignment is particularly used in the areas of financing and security, when future or not yet particularly determined claims are assigned as security for claims.
In contrast to the ordinary assignment, where a clearly determined claim is already transferred between assignor and assignee, the blank assignment is characterized by remaining uncertainties regarding the determination or scope of the assigned claim.
Legal Classification and Requirements
Requirements for Validity
For a blank assignment to be legally effective, certain requirements must be met, which essentially arise from Sections 398 et seq. of the German Civil Code (BGB):
- Determinability of the Claim: The claim must be at least determinable at the time of assignment. This means it must be sufficiently identifiable based on the assignment certificate and accompanying documents as soon as it arises. Individualization can thus also occur later.
- Future Claims: It is permissible to assign future (not yet arisen) claims as long as they are sufficiently determinable (Section 398 BGB by analogy, established case law).
- Formal Requirements: Generally, no special formal requirements apply to the assignment of claims, unless the underlying transaction itself is subject to a form requirement.
Distinction from Related Contract Models
The blank assignment must be distinguished from similar agreements such as the global assignment or the framework assignment:
- Global Assignment: In a global assignment, all present and future claims from a certain legal relationship are assigned. The blank assignment can be understood as a subtype of this if certain claims are specified later on.
- Framework Assignment: This involves the assignment of an individualized pool of claims up to a certain upper limit; the claims are typically more specifically defined than in the blank assignment.
Practical Areas of Application
Security Assignment
The blank assignment is primarily used in security assignments, especially in banking law and in the granting of credit. Typically, this concerns the assignment of claims arising from future deliveries and services or insurance claims to secure a loan or credit. Credit institutions often use the blank assignment to safeguard themselves against the risk of claim default.
Factoring and Receivables Management
Blank assignments are also regularly used in the context of factoring, i.e., the purchase of receivables by third parties, to transfer later claims to a factor.
Legal Effect and Risks
Legal Consequences of the Blank Assignment
In principle, the blank assignment only takes effect against the debtor of the claim once the claim is definitively individualized and the debtor has been notified of the assignment (notice of assignment). Until this point, the legal situation for the debtor often remains unchanged.
Good Faith Acquisition
A good faith acquisition of a claim in the context of a blank assignment is generally not provided for, as claims cannot be transferred by possession like physical objects and assignment law does not recognize the effect of possession.
Risks for the Security Holder
As the claim assigned in a blank assignment only arises in the future or must be further specified, there is a risk of ineffectiveness if the required determinability is lacking. In such cases, the assignment may be ineffective, which can be disadvantageous for the security holder, especially in the event of enforcement.
Furthermore, potential conflicts with statutory prohibitions on assignment must be considered, for example if the assigned claim is excluded from assignment by law or by agreement between creditor and debtor (Section 399 BGB).
Blank Assignment in Insolvency Law
Effects in the Event of Insolvency of the Assignor
If insolvency proceedings are opened over the assignor’s assets, the claims secured by blank assignment are generally insolvency-proof, provided the claims were already transferred at the time of opening of the insolvency proceedings or the assignment was sufficiently specified (cf. Section 91 InsO). However, disputes often arise regarding the effectiveness of assignments of future claims in insolvency.
Contestation Risks
Blank assignments can be reclaimed within the scope of insolvency contestation (Sections 129 et seq. InsO) if they are regarded as disadvantaging other creditors. This applies in particular if the assignment occurred during a crisis and the security holder can be shown to have knowledge of the debtor’s insolvency.
Special Features and Limits of the Blank Assignment
Prohibitions on Assignment and Restrictions
Claims may be non-assignable by operation of law or by contractual agreement (Section 399 BGB). In the context of blank assignments, it is therefore necessary to carefully examine whether the claim to be assigned is in fact assignable. This particularly affects strictly personal claims or those excluded from assignment by contract.
Transparency and Information Obligations
Particularly in the case of blank assignments for credit security, there are special information requirements towards third parties, since the affected debtors often do not know to whom they should pay. Proper notification of the assignment is therefore essential for the acquirer of the claim.
Overcollateralization and Re-Assignment
In the context of the security blank assignment, overcollateralization can occur if the value of the assigned claims significantly exceeds the secured claim. According to the case law of the German Federal Court of Justice, in such a case the security holder is obliged to re-assign the excess claims upon request.
Summary and Importance in Practice
The blank assignment is a versatile legal instrument with significant practical relevance, particularly in the area of security assignments for external financing of companies and individuals. It enables flexible security even for future, not yet existing claims, but requires strict compliance with civil law requirements regarding determinability, validity, and transparency. Errors in the structure of a blank assignment can have serious financial and legal consequences, particularly in case of insolvency or unclear contractual relationships.
The legal treatment of the blank assignment is characterized by extensive case law and requires a precise understanding of assignment law and the respective application situation. Careful contractual drafting and continuous monitoring of the assigned claims therefore form the basis for the successful practical use of the blank assignment.
Frequently Asked Questions
What legal requirements must be met for the validity of a blank assignment?
Various legal requirements must be met for the validity of a blank assignment. First, it must be noted that a blank assignment as a declaration of assignment without full specification of the claim is generally possible; however, it is important that the intention to assign and the contractual framework in which the blank assignment is used are sufficiently determined. A valid assignment contract (Section 398 BGB) further requires that the parties have a claim that can be concretely determined, even if it is not yet individualized at the time of assignment. What is decisive is that the claim can be determined and legally exists, or can arise in the future (advance assignment), at the time it is included in the blank assignment. Additionally, the purpose of the assignment must be clearly specified—often for security interests, for example in favor of banks. Finally, prohibitions on assignment or limitations arising from the underlying legal relationship (Section 399 BGB) must not conflict. In the case of certain types of claims (e.g., wage claims), there are also often statutory restrictions on assignment. The blank assignment does not generally require any specific form, unless the law prescribes a particular form (e.g., for claims arising from mortgages or land charges).
How does the blank assignment relate to the security assignment?
In practice, the blank assignment is frequently used as a security assignment, for example for credit security in favor of banks or suppliers. The debtor declares in advance that they assign future or not yet specifically identified claims to the security holder. This security assignment in blank is often part of a global assignment. The special feature is that at the time of the assignment, the specific claim is not yet designated, but must be sufficiently determinable. According to established case law, validity is measured by whether, at least from the perspective of external third parties, it is retrospectively sufficiently clear which claim was assigned. The general principles of security assignment further apply: the assignment is accessory to the security purpose, meaning it exists as long as this purpose exists and reverts to the assignor once the purpose ceases (e.g., repayment of the loan). The parties can make special provisions in the blank assignment contract regarding fulfillment (collection, release, priority).
What dangers and risks exist in the use of a blank assignment?
The use of blank assignments carries considerable legal risks, particularly with regard to the determinability of the assigned claim. If this is not sufficiently individual or determinable, the assignment may be invalid under Section 398 BGB. There is also a risk of overcollateralization if too many or too high claims are assigned as security—with the consequence that creditors are obliged to re-assign them. When several assignees come together, there can be disputes over priorities, for example if several banks have received blank assignments (so-called ‘double assignments’). Furthermore, there is a risk of contestation under the Insolvency Code if blank assignments are concluded or extended during a crisis or shortly before insolvency (Sections 129 et seq. InsO). Finally, a lack of disclosure obligation of the assignee towards the debtor can lead to confusion or additional objections.
What is the significance of the determinability of the claim in the context of the blank assignment?
Determinability of the claim is the central legal criterion for the effectiveness of a blank assignment. While the claim does not have to be individualized at the time of the assignment declaration, it must at least—retrospectively—be possible to identify the assigned claim unambiguously. The Federal Court of Justice (BGH) requires that external third parties must be able, afterwards, to recognize without difficulty which claims were covered by the assignment based on objective data. This is typically ensured by referencing types of claims, lists of debtors, or invoice numbers. A lack of such retrospective determinability renders the blank assignment void according to the prevailing opinion. The requirement of determinability is also of central importance for the effectiveness in the event of insolvency and in contestation scenarios.
What happens to a blank assignment in the event of insolvency of the security provider?
In the event of insolvency of the security provider, the blank assignment is subject to special treatment. To begin with, the claim already validly assigned remains outside the insolvency estate, provided determinability is given and it is an insolvency-proof security assignment. This claim is generally not made freely available to the insolvency administrator. However, difficulties arise if the claim arises or is individualized only after the opening of the insolvency proceedings; in this case, it is decisive whether it is an effective advance assignment and whether the claim can still be filled out between the parties within the scope of the security purpose. The insolvency administrator must then examine whether the assignment is contestable under insolvency law, particularly in cases of unfair security granting shortly before insolvency or impermissible preference of individual creditors. In addition, the insolvency court may consider blank assignments invalid if the requirements of Section 398 BGB have not been met.
Can future claims also be assigned under a blank assignment?
Yes, the assignment of future claims is possible under German law, provided the claims are at least determinable at the time of their arising (Section 398 BGB by analogy). In the case of a blank assignment, this option is often used, for example for all claims from deliveries and services that will in future be owed by a certain debtor. Admissibility extends to those claims that are causally related to the security purpose and whose determinability is documented in the contract. In the assignment of future claims, the assignment remains ‘suspended’ until the claim actually arises, but becomes fully effective upon realization of the claim (principle of anticipated assignment). The assignment of completely indeterminate or statutorily excluded claims is not permitted. Special care must also be taken regarding prohibitions on assignment, which are often stipulated in general terms and conditions or individual contracts and can limit the blank assignment of future claims.
