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words, if the transaction between the assignor and assignee is invalid,
then the assignment of receivables that is based on the main agreement,
shall be invalid, as well.
The assignment of receivables that is used as security under bank-
ing practices, and is generally enforced if the party fails to duly fulfill
its obligations (in the event of default). If the assignment of receivables
is contingent upon the occurrence of an event, then the relevant receiv-
ables shall be paid to the assignor after the occurrence of such condi-
tion or event.
Form of the Assignment of Receivables Agreement
Pursuant to Art. 184 of the Code, the assignment of receivables
agreement shall be made in writing. An assignment of receivables
agreement that is not executed shall be void. The express intention,
declaration, and signature of the assignor are the key points, and the
intention of the assignee is neither required, nor necessary, for the
assignment of receivables agreement to be valid
4
. In practice, the
assignment of receivables agreement is mutually executed by the
assignee and the assignor. Moreover, in transactions where a bank is
the assignee, the bank will generally prefer and require the execution
of the assignment of receivables agreements to be notarized, by stating
that this method strengthens the proof mechanism, and determines the
time for such an assignment. Thus, the debtor is notified by the notary
public.
The terms and conditions regarding the assigned receivables are
set forth under the assignment of receivables agreement; the assigned
receivables shall be determined as specifically set forth under the
agreement.
Effects and Consequences
The subject of the assignment of receivables also includes affiliat-
ed rights (Art. 189 of the Code). Interest accrued on the assigned
receivables shall also be deemed to have been assigned. However, the
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Eren
, p. 1233.