What I Know Questions: What I Learned

ART. 1475. The contract of sale 1. How is the contract for The contract for the assignment
is perfected at the moment assignment of credit perfected? of credit and other incorporeal
there is a meeting of minds rights is perfected from the
upon the thing which is the moment the parties agree upon
object of the contract and upon the credit or right assigned and
the price. From that moment, upon the price even if neither
the parties may reciprocally has been delivered.
demand performance, subject
to the provisions of the law
governing the form of contracts

At the perfection of the 2. What are the warranties of Warranties of the Assignor of
contract of assignment, the the assignor of credit? Credit
creditor warrants the At the perfection of the
following: existence and contract of assignment, the
legality of the credit. creditor warrants the following:
1. existence and
2. legality of the credit
The assignor or the original
creditor does not warrant the
solvency of the debtor unless it
is expressly stipulated or unless
the insolvency was already
existing and of public
knowledge at the time of the
assignment. If there are breach
of the above warranties, then
the assignor shall be held liable.

The assignment of a credit 3. What is the extent of the Without the consent of the
includes all the accessory assignment of credits? Explain debtor, transfers his credit and
rights, such as guaranty, accessory rights to another,
mortgage, pledge or known as the assignee, who
preference. acquires the power to enforce it
to the same extent as the
assignor could enforce It against
the debtor.
Exercise I

1. Is the consent of the debtor to assignment required? Explain

For our purposes, the crucial distinction deals with the necessity of the consent of the debtor in the
original transaction. In an assignment of credit, the consent of the debtor is not necessary in order that
the assignment may fully produce legal effects.  What the law requires in an assignment of credit is not
the consent of the debtor but merely notice to him as the assignments takes effect only from the time
he has knowledge thereof. A creditor may, therefore, validly assign his credit and its accessories without
the debtor's consent.

2. What is the binding effect of an assignment if the same is not notarized?

Contracts don't need to be notarized, as the signed contract itself is legally binding. However, if a
potential legal dispute arises between the parties, having the contract notarized can be very beneficial.
Having a notary will provide proof of the parties entering into the contract.

3.What does an assignor of credit warrant and what liabilities will he incur in case of violation thereof?

According to the module, assignor in good faith is one who has no knowledge of any circumstances like
the insolvency of the debtor at the time the assignment is perfected. The assignor in good faith who has
violated the warranties stated shall be liable to the price received and to the expenses of the contract
and other legitimate payments by reason of the assignment. But the assignor is in bad faith shall also be
liable for damages.

Exercise I. TRUE or FALSE

TRUE 1. The contract of sale is perfected at the moment there is a meeting of minds upon the thing
which is the object of the contract and upon the price.

TRUE 2. Assignment of credits and other incorporeal rights are perfected also at the moment there is a
meeting of minds.

TRUE3. An assignment of a credit, right or action shall produce no effect as against third person, unless it
appears in a public instrument.

TRUE 4. The assignment of a credit excludes all the accessory rights, such as a guaranty, mortgage,
pledge or preference.

TRUE 5. Only notice to the debtor of the assignment of credit is required. His consent is not required.

FALSE6. The vendor in good faith shall be responsible for the existence, legality and solvency of the
debtor at the time of sale.

TRUE 7. In assignment of credit, the object is credit, incorporeal rights or rights of action.

TRUE 8. In a contract of sale, the object is property.

TRUE 10. In assignment of credit, it must appear in a public instrument to produce effect as against third
person.