Concept and Fundamentals of Blank Assignment
Die Blank Assignment is a term from German assignment law and describes a specific form of assignment of claims, in which the claim to be assigned at the time of contract conclusion is not yet or not conclusively individualized. The blank assignment is mainly used in financing and security contexts when future or not yet specifically determined claims are assigned as collateral for claims.
In contrast to ordinary assignment, where a clearly defined claim is transferred between assignor and assignee, the blank assignment is characterized by there still being uncertainties regarding the specification or scope of the assigned claim.
Legal Classification and Requirements
Requirements for Validity
For a blank assignment to be legally valid, certain requirements must be met, which essentially arise from §§ 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 that it must be sufficiently identifiable based on the assignment document and accompanying documents as soon as it arises. Individualization can therefore also be supplied later.
- Future Claims: It is permissible to assign future (not yet arisen) claims as well, as long as they are sufficiently determinable (§ 398 BGB by analogy, established case law).
- Formal Requirements: As a rule, there are no special formal requirements for 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 arrangements such as the global assignment or cover assignment:
- Global Assignment: In global assignment, all current and future claims arising from a specific legal relationship are assigned. Blank assignment may be understood as a sub-form of this if individual claims are specified at a later stage.
- Cover Assignment: This refers to the assignment of an individual pool of claims up to a certain upper limit; the claims are typically more specifically defined than in a blank assignment.
Practical Application Areas
Assignment for Security Purposes
Blank assignment is used particularly in security assignments, especially in banking law and lending. A typical case is the assignment of claims arising from deliveries and services yet to be created, or of insurance claims, as security for a loan or credit. Credit institutions often use blank assignment to protect themselves against the risk of default.
Factoring and Claims Management
Blank assignments are also regularly used in the context of factoring, that is, the purchase of claims by third parties, to transfer later claims to a factor.
Legal Effect and Risks
Legal Consequences of Blank Assignment
The blank assignment only takes effect against the debtor of the claim once the claim has been finally individualized and the debtor has been informed of the assignment (notice of assignment). Until that time, the legal situation for the debtor generally remains unchanged.
Acquisition in Good Faith
The acquisition of a claim in good faith within the scope of blank assignment is, as in the case of normal assignment, generally not provided for, since claims are not transferred by possession like corporeal objects and assignment law does not recognize the effects of possession.
Risks for the Secured Party
Since the claim assigned in blank assignment arises later or must be specified in more detail, there is a risk of invalidity if the required determinability is lacking. In these cases, the assignment may be ineffective, which can be detrimental to the secured party, especially if the security is needed.
Potential conflicts with statutory prohibitions on assignment must also be considered, for example if the assigned claim is excluded from assignment by law or by an agreement between creditor and debtor (§ 399 BGB).
Blank Assignment in Insolvency Law
Consequences in Case of Assignor’s Insolvency
If insolvency proceedings are opened over the assignor’s assets, claims secured by blank assignment are generally insolvency-proof, provided the claims were already transferred at the time of the insolvency opening or the assignment was sufficiently specified (see § 91 InsO). However, disputes frequently arise regarding the effectiveness of assignments of future claims in insolvency.
Risks of Challenge
Blank assignments can be challenged in insolvency proceedings (§§ 129 et seq. InsO) and reclaimed if they are considered detrimental to other creditors. This particularly applies if the assignment took place during a crisis and the secured party is proven to have knowledge of the debtor’s insolvency.
Special Aspects and Limits of Blank Assignment
Prohibitions and Restrictions on Assignment
Claims may not be assignable by operation of law or contract (§ 399 BGB). In the case of blank assignments, it is therefore essential to check whether the claim to be assigned is actually assignable. This is especially relevant for highly personal claims or those whose assignment is excluded by contract.
Transparency and Information Obligations
Especially in the case of blank assignment for credit security purposes, there are special information obligations towards third parties, since affected debtors often do not know to whom they are to make payment. Proper notice of the assignment is therefore essential for the acquirer of the claim.
Over-Collateralization and Reassignment
In the context of blank security assignment, over-collateralization may occur if the value of the assigned claims significantly exceeds the secured claim. According to the case law of the Federal Court of Justice, in such a case, the secured party is obliged to reassign the excess claims upon request.
Summary and Practical Significance
Blank assignment is a versatile legal instrument with considerable practical relevance, especially in the area of security assignment for external financing of companies and individuals. It allows for flexible collateralization even for future, not yet existing claims, but requires strict adherence to the civil law requirements regarding determinability, validity, and transparency. Errors in the drafting of a blank assignment can have serious financial and legal consequences, especially in insolvency cases or unclear contractual relationships.
The legal treatment of blank assignment is shaped by extensive case law and requires a precise understanding of assignment law and its respective practical implementation. Careful contractual drafting and continuous monitoring of the assigned claims therefore form the basis for the successful practical use of blank assignment.
Frequently Asked Questions
What legal requirements must be met for a blank assignment to be valid?
Various legal requirements must be met for a blank assignment to be valid. First, it should be noted that a blank assignment, as an assignment declaration without a complete designation of the claim, is generally possible; it is important, however, that the intention to assign and the framework for the use of the blank assignment are sufficiently determinate. Furthermore, a valid assignment contract (§ 398 BGB) requires that the parties have a claim that is specifically determinable, even if it is not individualized at the time of the assignment. What is decisive is that the claim is determinable and legally existent at the time of incorporation into the blank assignment or can arise in the future (anticipatory assignment). Additionally, the purpose of the assignment must be clearly identified—often for security purposes, e.g., for banks. Finally, prohibitions or restrictions on assignment from the underlying obligation (§ 399 BGB) must not prevent the assignment. In the case of special types of claims (e.g., wage claims), statutory restrictions on assignment may also exist. Generally, blank assignment does not require a specific form unless the law prescribes one (e.g., for claims from mortgages or land charges).
How does blank assignment relate to security assignment?
Blank assignment is frequently used in practice as security assignment, for example for credit security in favor of banks or suppliers. In this case, the debtor declares in advance that he assigns future claims or claims to be specified in more detail to the secured party. This security assignment in blank often takes place within the scope of a global assignment. The special feature is that at the time of the assignment, the exact claim need not yet be specified, but must be sufficiently determinable. According to established case law, validity depends on whether, at least from the perspective of external third parties, it is retrospectively possible to determine which claim was assigned. Furthermore, the general principles of security assignment apply: The assignment is accessory to the security purpose, i.e., it is effective with it and lapses when the purpose ceases (e.g., repayment of the loan) and returns to the security provider. The parties may make special arrangements in the blank assignment contract regarding completion (collection, release, priority).
What risks and dangers exist in using a blank assignment?
The use of blank assignments carries significant legal risks, particularly regarding the determinability of the assigned claim. If the claim is not sufficiently individual or determinable, the assignment may be invalid under § 398 BGB. There is also a risk of over-collateralization if too many or excessively high-value claims are assigned as security, with the consequence that creditors may be required to reassign some claims. If several assignees are involved, ranking disputes may arise, e.g., if multiple banks hold blank assignments (the so-called “double assignments”). There is also a risk of challenge under insolvency law if blank assignments are made or expanded during a crisis or shortly before insolvency (§§ 129 et seq. InsO). Finally, lack of disclosure by the assignee to the debtor can cause confusion or additional defenses.
Why is the determinability of the claim so important in blank assignment?
The determinability of the claim is the central legal criterion for the validity of a blank assignment. Although the claim need not be individualized when the assignment declaration is made, it must be possible—retroactively—to clearly identify the assigned claim. The Federal Court of Justice requires that external third parties can later recognize, based on objective information, which claims are covered by the assignment. This is typically established by reference to types of claims, debtor lists, or invoice numbers. If such retrospective determinability is lacking, the blank assignment is void according to prevailing opinion. The requirement of determinability is also crucial for validity in insolvency and in the event of challenges.
What happens to a blank assignment in the event of the security provider’s insolvency?
In the event of the security provider’s insolvency, blank assignment is subject to special treatment. First, the already validly assigned claim remains outside of the insolvency estate if determinability exists and there is bankruptcy-proof security assignment. This claim is generally not freely available to the insolvency administrator. However, difficulties arise if the claim is created or individualized only after the opening of insolvency proceedings; the decisive question is whether there was a valid anticipatory assignment and whether the claim could still be specified between the parties within the scope of the security purpose. The insolvency administrator must then determine whether the assignment is contestable under insolvency law, especially in case of improper granting of security shortly before insolvency or impermissible favoring of individual creditors. In addition, the insolvency court may regard blank assignments as invalid if the requirements of § 398 BGB were not met.
Can future claims also be assigned as part of a blank assignment?
Yes, the assignment of future claims is permissible under German law as long as the claims are at least determinable at the time they arise (§ 398 BGB by analogy). In the case of blank assignment, this possibility is frequently used, for example for all claims from deliveries and services that will in future accrue to a particular debtor. This is allowed for claims causally related to the security purpose and for which determinability is documented in the contract. In the assignment of future claims, the assignment remains ‘pending ineffective’ until the claim actually arises, but takes full effect upon realization (principle of anticipatory assignment). The assignment of entirely indeterminable or statutorily excluded claims is not permitted. Special care must be taken with prohibitions on assignment, which are often stipulated in general terms and conditions or individual contracts and can limit the blank assignment of future claims.
