Q&As

Where a contractual debt has been assigned, can a counterclaim be brought against the assignee for the contracting party’s breach?

read titleRead full title
Published on LexisPSL on 02/07/2019

The following Dispute Resolution Q&A provides comprehensive and up to date legal information covering:

  • Where a contractual debt has been assigned, can a counterclaim be brought against the assignee for the contracting party’s breach?

This Q&A uses the following scenario: A and B enter into a contract whereby A agrees to purchase a widget from B for a price of £1,000. B provides the widget to A, but A considers that the widget contains various defects that will require £1,500 to fix and so pays nothing for the widget. Before any payment is made, B assigns the entire debt owed by A to a third party, C. C is now seeking to recover the full purchase price of £1,000, notwithstanding the existence of alleged defects.

In this scenario, the underlying transfer between A and C is that C has been assigned a cause of action by B to recover the debt owed which arose under the original contract between A and B.

Where a party is assigned a cause of action, that assignment will ordinarily take effect subject to any rights of set-off t

Popular documents