What is a prohibition on assignment of claims?
There is increasing talk about the prohibition of assignment, which as a provision appears in contracts between two entrepreneurs. However, what is an assignment? This is simply the transfer of an as yet unpaid claim to another entity. According to Art. 509. § 1 of the Civil Code(Section I – Change of creditor):
“The creditor may, without the consent of the debtor, transfer the claim to a third party (assignment), unless this would be contrary to the law, a contractual stipulation or the nature of the obligation.”
In practice, this means that in most cases the assignment is legal, possible and permissible. This makes it safe to use factoring, for example – so you can sell an invoice before the due date and get the funds much faster. For many entrepreneurs, especially in the SME sector, this is an excellent option to take care of the liquidity of their business. This solution is primarily used by companies that issue invoices with deferred payment terms (e.g. 30-60 days). Once the assignment is signed, it is the factoring company that receives the money in its account, so the contractor receives a new bank number for repayment.
So is a ban on assignment of claims even legal and possible? Yes – one exception is to include such a provision in a contract between two entities.
If such a provision appears, the receivables cannot be transferred to another company, such as a factoring company. The ability to include a prohibition on assignment stems from the freedom of contracts between entrepreneurs, who can include virtually anything in such a document.
What does the prohibition of assignment look like in a contract? You can find a template for such a document on the Internet or from a legal advisor, who will present you with all your options. The specialist will also suggest how to avoid such a record in your situation. For example, there may be a provision in the contract that the prohibition can be lifted in writing in certain cases (such as when you want to use factoring). However, before signing a contract with a prohibition on assignment, it is worth thinking carefully.
When does the prohibition on assignment in a contract apply?
The prohibition on assignment in the contract is a safeguard for only one party. Most often this solution is used by large companies, which have an advantage over smaller entrepreneurs and are very eager to use it. Typically, an SME company simply does not have the negotiating power or choice to contract with another contractor. Why are some companies so eager to include such a provision in the contract?
For them it is:
- collateral even in a situation where there will be a temporary inability to repay the funds – meaning that you may be left without money,
- less paperwork – no need to change the payment account, posting method, etc.
- Willingness to dictate terms – large companies often take advantage of their position relative to smaller entrepreneurs.
For years, however, attention has been drawn to the theoretical unfairness of this solution and the fact that it restricts economic freedom. It is worth remembering that the prohibition on assignment applies not only to the transfer of, for example, an invoice to a factoring company (even before the due date has passed). In practice, it is also binding when the due date passes – that is, when a debt is incurred. An entrepreneur who has agreed to a prohibition on assignment in a contract can therefore not effectively enforce payment.
A new law is currently being drafted (a draft Law on Amendments to the Law on Prevention of Excessive Delays in Commercial Transactions and the Law on Public Finance has been created). Once enacted, it would change the law and protect businesses from such frequent use of assignment bans in B2B contracts.
In the March 9, 2022 Regulatory Impact Statement (RIA). one can read the rationale for the need for just such a law. Among other things, those responsible for the project indicated that:
“Currently, the institution of a contractual prohibition on the assignment of receivables is being abused, which can result in a loss of liquidity and, consequently, in payment bottlenecks. The purpose of the amendment is to counteract situations in which an entity that fails to meet its basic contractual obligations, which is to pay the monetary consideration on time, can at the same time invoke a contractual stipulation on the impermissibility of assignment.”
Is it worth agreeing to a ban on assignment of claims?
The prohibition of assignment of claims in the contract is a rather problematic provision. You already know that signing a contract with a passage on the prohibition of assignment of claims can cause:
- Liquidity problems and payment bottlenecks,
- no possibility of transferring the receivables to another entity to obtain funds more quickly and efficiently (including when the due date has passed).
The best option, therefore, is to avoid this provision and use negotiation even before the contract is signed. If the counterparty does not agree, it is worth taking care to at least include an addendum that allows negotiation if necessary. It is worth undertaking such negotiations and knowing the contents of the contract thoroughly before signing it.
Factoring vs. prohibition of assignment of receivables
You issue deferred payment invoices, but you want to get the money faster by using factoring-but there’s a prohibition on assignment of receivables in the contract? What to do in such a situation? Is it possible to use the services of a factoring company?
In theory, some advise using silent factoring in this case, that is, without assignment and without informing the counterparty. In most cases, however, this is not an appropriate solution, as you may violate the terms of the contract and expose yourself to penalties and image loss.
The best option is to try to negotiate with the company with which you have a contract – to be able to use open factoring in a given case. This is an option that is based on honesty.
What arguments should you use to encourage your counterparty to change the non-assignment provision? If you use factoring, you increase your competitiveness in the market. You can offer longer payment terms (even dozens of days), and at the same time avoid bottlenecks (you will get the funds from the factoring company). For many entrepreneurs, the ability to pay off an invoice after a longer period of time is an important consideration and quite a convenience.
The ban on assignment of claims is still a possible and legal solution. If your counterparty wants to include such a provision in the contract, however, it is worth betting on negotiations. The provision is relatively problematic and could cause problems with free access to funds in the future.
06.05.2026 
