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Cession and Assignment of Agreements Template in South Africa
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Cession and Assignment of Agreements Template in South Africa
A Cession and Assignment of Agreements is to transfer contractual rights and benefits to another party.
- Transfer contractual benefits.
- Ensure debt repayment.
- Reduce risk of default.
CESSION AND ASSIGNMENT OF AGREEMENTS
Summary A Cession of Agreements may be used where the rights and obligations under an agreement need to be ceded and assigned to another person. By signing a Cession & Assignment of Agreements, the Cedent agrees to transfer to the Cessionary the right to claim money and any other benefits owed to the Cedent in terms of the Agreement/s.
Why do I need a Cession of Agreements? The reasons for ceding and assigning an agreement are varied, and could include restructuring of an organisation, the transfer of a business, or the purchase of a debt. This Assignment Agreement provides for the cession of rights and the delegation of obligations from one person to another.
What does the Cession Contract say? The Cession & Assignment contract template can be printed onto three pages.
What do you need to do to use a Cession of Agreements?
- Read the cession and assignment document to ensure that it suits your requirements. Make changes as required.
- Complete the relevant details, and get both parties to sign.
Also known as: Cession Agreement; Terms of Cession; Transfer of Rights & Obligations; Cession & Delegation Agreement.
Cession and Assignment of Agreements Template South Africa [Microsoft Word Doc]
The Use and Benefits of a Cession And Assignment of Agreements Template:
A cession and assignment agreement/pledge involves the transfer of rights and obligations from one party, known as the cedent, to another party, known as the cessionary and place those right in the individuals own name. This type of agreement is commonly used in South African common law and can apply to personal right, movable property belonging to the cedent’s estate transferred to the cessionary’s estate, and security cession (also known as securitatem debiti ) by way of this transfer agreement.
In this contract, the party ceding their rights, known as the cedent, agrees to transfer those rights to the party receiving them, referred to as the cessionary. It specifies the terms and conditions of its existence , including payment, that both parties must respect. It outlines the rights and obligations of the parties to the cession, ensuring compliance with the law in respect of this cede.
The cedent cedes their interest in a particular asset, such as property or securities, to the cessionary as security for money owed or other obligations.
The contract establishes the payment terms for any money and conditions, providing a legal framework for the cession and ensuring that the cedent’s interests and the cessionary’s security are protected.
Here are some key points to keep in mind in relation to this agreement:
- A cession agreement/pledge involves the transfer of ceded rights from the cedent to the cessionary.
- Cession agreements/pledge can apply to personal rights, movable property, and security.
- The cessionary acquires the determined rights and obligations of the cedent.
- The agreement/ pledge must be in writing to be valid.
- The cedent retains any reversionary rights they may have had.
- The agreement/ pledge can be used for the transfer of debts, payments, and other obligations.
- A cession and assignment agreement can be used for insurance policies and bank accounts.
- The agreement/ pledge can be used to secure a debt through securitatem debiti or the pledge theory whereby the cedent pledges or encumbers its personal rights against its debtor and transfers such rights to the cessionary (ceded right(s)) to secure the fulfilment, by the cedent or a related party, of an obligation owed to the cessionary.
- The cedent divests themselves of the ceded right and the cessionary becomes the new owner under the pledge.
- The cessionary must have locus standi or legal standing to enforce the rights (they must be the owner of such rights).
- The agreement/ pledge must comply with the law and be determined to be valid.
- The cessionary may have authority granted to them to act on behalf of the cedent in a particular manner.
- The cessionary is entitled to any future proceeds resulting from the transferred rights.
- The cedent may retain reversionary rights or reversionary interest.
A cession agreement is a legal document that transfers the rights and obligations of one party, the cedent, to another party, the cessionary. In South African law, a cession agreement is a common way of assigning debts and other claims and have been in use for more than a century. A security cession refers to the transfer of rights to secure a debt or obligation.
Personal rights, such as claims arising from a contract, can be ceded, meaning that the cessionary can enforce those rights in the same manner as the cedent. However, the cedent’s personal rights, such as their right to privacy or dignity, cannot be transferred, whereas debt can be transferred.
Movable property, such as bank accounts or insurance policies, can also be ceded, with the cedent transferring ownership to the cessionary. In some cases, a cession agreement may contemplate the transfer of the cedent’s interests in future property.
The cession agreement must include certain clauses to be valid, such as a description of the rights being ceded and any conditions or restrictions on the cession. The cessionary must also have locus standi, or legal standing, to enforce the ceded rights.
In the cession contemplated under this agreement, the cedent relinquished themselves of the ceded rights, which become the property of the cessionary and is thus no longer the property of the original owner. However, the cedent may retain reversionary rights or reversionary interest, meaning that they will regain the ceded rights if certain conditions are met by way of due performance.
As mentioned, a cessionary’s obligations are determined by the law applicable to the type of security instrument that creates the security. Authority for this is to be found in Bisnath v Absa Bank Limited; Absa Bank Limited v Bisnath and Another  3 All SA 219 (SCA)
Under South African law, a cession agreement is a useful tool for transferring obligations undertaken by one party to another . It allows for the transfer of debt and other claims by one creditor or more, and provides a means for securing those obligations. Should you wish to transfer book debts, you will need to conclude a specific agreement for that. In the event of a dispute, a court may be called upon to determine the validity of the cession and the rights of the parties to the pledge.
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