Section 9 – Warrandice implied in the assignation of a claim
58.This section provides for the warranties that an assignor is deemed, unless agreed otherwise, to give to the assignee in respect of an assigned claim when granting an assignation document. It replaces the current law and clarifies the effect of warrandice. See section 17(1)(d) for the repeal of the current law.
59.Subsection (2) provides that for assignation documents granted for value, the implied warrandice reflects the common law principle of warrandice debitum subesse (the debt exists). This principle means that the assignor guarantees to the assignee the existence of the claim. As such, if the assignee finds that the claim is barred because, for example, the assignor personally barred themselves from seeking performance, the assignor is in breach of warrandice and must compensate the assignee.
60.Subsection (3) provides that in the case of assignation documents granted gratuitously (for no value), the implied warrandice reflects the common law principle of warrandice of facts and deeds only.
61.Subsection (4) provides that the assignee is not held to warrant that the debt will be paid. In other words, the assignor does not guarantee that the debtor is solvent and can pay the debt.
62.Subsection (5) has the effect that the warranties are, where applicable, implied in any contract relating to the assignation of a claim as well as in the assignation document itself.
