Data

Date:
03-10-2007
Country:
Poland
Number:
IV CSK 160/07
Court:
Supreme Court of Poland
Parties:
--

Keywords

ASSIGNMENT CONTRACT - GOVERNED BY POLISH LAW - REFERENCE TO UNIDROIT PRINCIPLES IN SUPPORT OF SOLUTION PROVIDED BY 1988 OTTAWA CONVENTION ON INTERNATIONAL FACTORING AS WELL AS BY PRINCIPLES OF EUROPEAN CONTRACT LAW

Abstract

"Party A and party B are parties to a sale of goods contract. Party A and party C are parties to a factoring agreement. A fails to deliver the goods ordered by B but issues an invoice. B disputes the invoice and defaults on its payment. Within the scope of the factoring contract A (assignor) assigns to C (assignee) its right to payment due from party B in line with the disputed invoice. After the assignment, A corrects the invoice concerning the payment due from B. According to the corrected invoice, B’s liability to A now equals zero. C requests payment from party B notwithstanding the latter’s defence (correction of the invoice) against the assignor.

The court stated that under the UNIDROIT Convention on international factoring, an agreement (here ‘correction of the invoice’) between the factor and the debtor is ineffective for the assignee if this agreement was made without the assignee’s consent and after the debtor was informed of the assignment. The court mentioned that the same follows from the UNIDROIT Principles (2004), although it did not indicate a specific principle. The court also pointed out that a similar solution is found in the Principles of European Contract Law (Articles 11.204 and 11.308). However, the court stated that in the circumstances of the case, on the basis of Polish law, the assigned liability might have retroactively expired in the light of failure to deliver the order. In such case, the assignment contract would be invalid. On these grounds, the Supreme Court returned the case to the Court of Appeal."

(cf. T. Wardyński / K. Przygoda in "Perspectives in Practice of the UNIDROIT Principles 2016", IBA Publication 2019, p. 310)

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