Factoring

Legal and equitable assignment

 

Factor takes legal or equitable assignment of debt.

 

Legal assignment

Three requirements for an effective legal assignment:

1. the assignment must be absolute and not purporting to be by way of charge and

2. it must be in writing and

3.notice of assignment must be given to the debtor

( Law and Practice of credit factoring by Biscoe, page 99)

Equitable assignment

Assignment which does not qualify as legal assignment will be come an equitable assingnment. ( Law and Practice of credit factoring by Biscoe, page 103.

 

Hence, if no notice is given to the debtor, it will be an equitable assignment.