The assignment of a claim is the contract by which a creditor — the assignor — transfers a claim to a third party — the assignee — who thereby becomes the new holder of that right. This mechanism is governed by art. 164 to 174 of the Code of Obligations (CO). Its fundamental characteristic is that it takes effect without the debtor's consent; the debtor is not a party to the transaction but is affected by its consequences. The assignment of claims is a frequently used instrument in practice, particularly in financing transactions, claims portfolio management and bank security arrangements.
The principle of assignment (art. 164 CO)
Art. 164 para. 1 CO establishes the fundamental principle: the creditor may assign a claim to a third party without the debtor's consent. The assignment is a legal act between assignor and assignee that takes effect independently of the debtor's will.
This principle is subject to three categories of exceptions, set out in art. 164 para. 1 CO, in which assignment is excluded:
- Statutory exclusion: certain claims are non-assignable by virtue of a statutory provision (for example, certain maintenance claims, strictly personal claims for moral damages, or wage claims within certain limits set by enforcement law).
- Contractual exclusion: the creditor and debtor may agree in their contract that the claim may not be assigned to a third party (non-assignment clause). Such a clause is valid and enforceable against an assignee who was aware of it.
- Exclusion by the nature of the matter: certain claims are non-assignable by reason of their strictly personal character, i.e. when the identity of the creditor is decisive for the performance of the obligation.
The form of the assignment (art. 165 CO)
Art. 165 para. 1 CO subjects the assignment to a written form requirement: the assignment is valid only if it is recorded in writing. This rule is a condition of validity (ad validitatem) and not merely a rule of evidence. The absence of writing renders the assignment void, and no other means of proof can remedy this formal defect.
By contrast, art. 165 para. 2 CO specifies that a promise to assign — that is, the preliminary agreement by which the parties undertake to conclude an assignment at a later date — is subject to no special form, unless a statutory provision to the contrary applies to the claim in question. It may therefore be concluded orally.
The writing required for the assignment itself may take the form of a private deed. It must identify the assigned claim sufficiently and express the assignor's intention to transfer it to the assignee.
The scope of the assignment (art. 170 CO)
The assignment does not cover only the principal claim. Art. 170 para. 1 CO provides that the claim passes to the assignee with all its ancillary rights, including in particular:
- Preferential rights (statutory privileges attached to the claim)
- Real security interests created as security (pledge of movables, mortgage)
- Suretyships guaranteeing the claim
- Accrued interest at the time of the assignment, unless otherwise agreed
- Other ancillary rights linked to the claim (formative rights, rights to documents)
This principle of accessoriness ensures that the assignee receives a claim as effectively secured as the one held by the assignor. The assignment of a suretyship in particular deserves attention: the surety remains bound to the assignee on the same terms as to the assignor.
Payment to the assignor before notification (art. 167 CO)
A debtor who has not been informed of the assignment may continue to treat the assignor as their creditor. Art. 167 CO expressly protects them: if the debtor pays the assignor in good faith before learning of the assignment, the debtor is discharged.
This rule rests on the protection of the debtor's good faith. For it to apply, two conditions must be met:
- The debtor was unaware of the assignment at the time of payment (subjective good faith)
- The debtor paid the assignor, i.e. the former creditor
If these conditions are satisfied, the assignee cannot demand a second payment from the debtor: they must seek recourse against the assignor who received the amount without entitlement. By contrast, if the debtor was aware of the assignment at the time of payment, the debtor is not discharged and remains liable to the assignee.
It is therefore for the assignee to notify the debtor of the assignment promptly in order to avoid this risk. This notification is subject to no particular form, but the burden of proving notification lies with the assignee.
Defences available to the debtor (art. 169 CO)
The assignment must not worsen the debtor's position. Art. 169 para. 1 CO guarantees this right: the debtor may raise against the assignee all defences they could have raised against the assignor at the time of learning of the assignment.
These defences include in particular:
- Non-existence or nullity of the assigned claim
- Extinction of the claim by payment, set-off or remission
- Set-off against a claim the debtor held against the assignor
- Defects of consent affecting the contract from which the claim arises
- Contractual defences (granted payment deferrals, unfulfilled conditions)
Art. 169 para. 2 CO specifies that if the debtor had a claim for set-off against the assignor, set-off remains possible after the assignment to the extent it was realisable at the time of notification.
The assignor's warranty (art. 171-173 CO)
The warranty regime of the assignor varies depending on whether the assignment is for consideration or gratuitous.
Assignment for consideration (art. 171 CO)
In the case of an assignment for consideration — when the assignor receives a counterpart for the transfer of the claim — art. 171 CO imposes on the assignor a warranty of the claim's existence at the time of the assignment. The assignor is liable if the claim:
- Does not exist or has never existed
- Has been extinguished (by prior payment, for example)
- Is affected by a defence the assignor did not disclose
This warranty is a statutory warranty; it applies even if no contractual clause provides for it. The parties may, however, extend or restrict it by agreement.
No warranty of solvency (art. 173 CO)
Art. 173 para. 1 CO establishes a clear rule: the assignor is not liable for the debtor's solvency, unless expressly agreed otherwise. The risk of the debtor's insolvency is thus transferred to the assignee along with the claim. If the parties wish the assignor to bear this risk — particularly in factoring transactions with recourse — they must stipulate this expressly in the deed of assignment.
Gratuitous assignment
In the case of a gratuitous assignment (for example a gift of a claim), the assignor owes no warranty of existence, unless otherwise stipulated. The assignee accepts the claim in the state in which it stands.
Comparison with other legal mechanisms
| Mechanism | Legal basis | Subject of transfer | Consent required |
|---|---|---|---|
| Assignment of claim | Art. 164 CO | The claim (asset) is transferred to a third party | Debtor's consent not required |
| Assumption of debt | Art. 175 CO | The debt (liability) is assumed by a third party | Creditor's consent required |
| Statutory subrogation | Art. 110 CO | Statutory transfer of the claim to the third party who paid | Operates by operation of law, without the parties' agreement |
| Novation | Art. 116 CO | The former obligation is extinguished, a new one arises | Agreement of all parties required |
| Delegation | Art. 176 CO | The delegating party instructs the delegate to pay the delegee | Tripartite agreement (delegating party, delegate, creditor) |
Statutory assignment (cessio legis)
In addition to conventional assignment, Swiss law recognises transfers of claims operating by operation of law, without any deed of assignment being necessary. These statutory transfers produce the same effects as conventional assignment but result from a legal event defined by statute.
The main cases of statutory assignment are:
- Art. 110 no. 1 CO: subrogation of the third party who pays another's debt while being bound to pay it jointly or on their behalf (joint and several co-debtor, hypothecary guarantor, surety)
- Art. 149 CO: the joint and several co-debtor who has paid more than their share is subrogated to the creditor's rights to the extent of their right of recourse against the other co-debtors
- Art. 401 CO: the principal who indemnifies the agent is subrogated to the agent's rights against third parties
- Various provisions of insurance law providing for the insurer's subrogation to the insured's rights (art. 72 ICA)
Assignment by way of security (fiduciary assignment)
Assignment by way of security, also known as fiduciary assignment, is a widely used practice in banking and finance. It consists of a debtor (the fiduciary assignor) transferring a claim to their creditor (the fiduciary assignee, typically a bank) as security for the repayment of a loan or the performance of an obligation.
From a legal standpoint, fiduciary assignment is an assignment within the meaning of art. 164 et seq. CO: it must satisfy the written form requirement and produces a genuine transfer of the claim. The distinctive feature is that this transfer is limited in its purpose: the assignee may exercise their rights over the claim only to the extent necessary to enforce the security. If the secured obligation is extinguished, the assignee is required to return the claim to the assignor.
In the event of the assignor's insolvency, the claim assigned by way of security does not fall into the bankruptcy estate (subject to the conditions of art. 164 CO and notification to the assigned debtor), which constitutes the main practical advantage of this security interest.
Frequently asked questions about the assignment of claims in Switzerland
Does the assignment of a claim require the debtor's consent?
No. Under art. 164 para. 1 CO, the creditor may assign a claim to a third party without the debtor's consent. The debtor is not without protection, however: they retain all defences they could have raised against the assignor, and are discharged if they pay the assignor in good faith before learning of the assignment (art. 167 CO). The assignment may, however, be excluded by agreement between the creditor and the debtor.
What form must the assignment take?
Art. 165 para. 1 CO requires that the assignment be recorded in writing to be valid. A simple written document suffices: it need not be notarised or signed before a notary. By contrast, a promise to assign a claim (the contract preceding the assignment itself) may be concluded without any particular form, unless the law provides otherwise for the claim in question.
What happens if the debtor pays the assignor after the assignment?
Two situations must be distinguished. If the debtor pays the assignor before learning of the assignment and in good faith, the debtor is discharged (art. 167 CO) — the assignee must then seek recourse against the assignor. If the debtor pays the assignor after learning of the assignment, the debtor is not discharged: the assignee may demand payment again, and the debtor will then have recourse against the assignor who received payment without entitlement.
Does the assignor guarantee that the debtor will pay?
No, as a rule. Art. 173 para. 1 CO states that the assignor is not liable for the debtor's solvency, unless otherwise agreed. In the case of an assignment for consideration, the assignor guarantees only the existence of the claim at the time of the assignment (art. 171 CO): they are liable if the claim does not exist, has been extinguished, or is affected by an undisclosed defence. The parties may, however, contractually provide for a more extensive solvency guarantee.
May I assign a claim as security for a loan?
Yes. Assignment by way of security (fiduciary assignment) is a recognised practice under Swiss law, commonly used in banking. The debtor (assignor) transfers a claim to the creditor (assignee, e.g. a bank) as security for the repayment of a loan. If the loan is repaid, the assignee returns the claim. This transaction is subject to the same rules of form and enforceability as any assignment (art. 165 CO).
For any question regarding the assignment of claims, the limitation of your claims, debt collection or more generally contract law, PBM Avocats advises you in Geneva and Lausanne. Our firm assists you in structuring and securing your civil law transactions.