Contractual assignment is a standard and widespread business practice that makes it possible to change a party to an already concluded contract and/or a person bound by contractual obligations. This method is relatively fast and safe.


The current law, Act no. 89/2012 Coll., the Civil Code, as amended (the “CC”), defines “contractual assignment” in its sections 1895 to 1900 CC. Unless prohibited by the nature of a given contract, either party may assign its rights and duties under all or part of that contract to a third party so long as 1) the counterparty to the contract agrees and 2) consideration has not already been provided. Where consideration is long-term or periodic, the contract may be assigned solely with respect to consideration not yet rendered.

Attention should be paid to the interpretation of the term “contract” under the Civil Code and the construal of related statutory provisions, especially those dealing with the concept of “obligation”. Under section 1723 (1) of the CC, an obligation may arise as a result of a contract, a legal offence or other legally relevant circumstances capable of creating obligations under applicable law. A contract is a transaction between two or more parties that establishes an obligation. The content of that obligation is, however, not determined solely by the contract (the basis of the obligation) but also by binding law, especially the CC. As such, an obligation refers to a legal relationship between a creditor and a debtor. The object of that obligation is the agreed performance while the substance of the relationship is the creditor’s claim mirrored by the debtor’s debt (the duty to render a performance).

This means that an obligation is, in fact, more than simply a claim/debt pairing. The notion of an obligation is much wider and includes additional rights and duties related to the debt. The content of an obligation is, thus, not dictated exclusively by the underlying contract (transaction). Under section 545 of the CC, a legal transaction, including a contract, has legal consequences that are specified during the transaction, i.e. in the text of the contract, as well as other legal effects dictated by law, propriety, customs and established practices between the parties. In other words, the actual content of an obligation is based on the underlying agreement and applicable law. The content of an obligation may, thus, change regardless of whether there are any amendments to the contract itself.

Nature and effects of contractual assignment

Contractual assignment results in a change to the legal relationship under the assigned contract. The assignee succeeds the assignor and assumes the legal position of the original party bound by the obligations.

Contractual assignment does not merely result in a change to the party bound by individual rights or duties, and it does not only concern the assignment or assumption of debt. Rather, the transfer applies to the entire legal situation of the assignor as the party initially liable under the assigned contract.

The assignee assumes the position of the assignor and replaces the assignor in all respects. This means that it assumes not only all duties related to the contractual consideration and its appurtenances but all associated rights and powers legally attached to the obliged party.

During the assignment of the contract, the assignor transfers to the assignee all its rights and duties under the assigned contract. These rights and obligations are transferred in the state that they were in when the assignment took effect (i.e. as soon as the assignment was approved by the counterparty). The assignee assumes all existing (unexpired) rights and duties arising from the contract or relevant legal obligation. This includes all terms and conditions of the assigned contract including details of consideration, price and payment terms (time, place and means of performance); quality standards; details of handover and acceptance; warranties; liability for any defects and sanctions and any other item agreed in the contract.


An assigned contract is binding on the counterparty from the time that it consents to the assignment. Provided that the counterparty so agrees in advance, it will be bound by the assignment from the time that that the assignment is reported to it by the assignor or proven to it by the assignee.

Consequences of contractual assignment

As soon as the contractual assignment is effective vis-à-vis the counterparty, the assignor is released from all its duties included in the assignment. The counterparty may avoid this consequence, however, if it subsequently notifies the assignor of its refusal to grant the release. In such a case, the counterparty may demand that the assignor provide the required consideration where the assignee has failed to do so. The counterparty should send the notice of its refusal within 15 days of the day on which it learned or should have learned about the assignee’s failure to provide the consideration. A delay in this notification will not render it ineffective. The counterparty will, however, be required to pay damages for any harm caused by the delay.


The counterparty retains the right to bring any counterclaims against the assignee that it might have brought against the assignor’s claims under the contract. Any other counterclaims against the assignor will also persist if so agreed in the contract or specified in the consent to the assignment. In the event that the contract is assigned partially or assigned to multiple assignees, it is not possible to reduce the rights of the counterparty derived from secondary clauses of the contract. Those rights include those related to terms and conditions, deposits, earnest payments, contractual penalties, contractual withdrawal, severance payments and arbitration clauses.

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