Deed of Assignment Philippines — Free Template

A Deed of Assignment is the instrument Filipino lawyers use to transfer intangible property — rights, credits, receivables, or contractual interests — from one party (the assignor) to another (the assignee). Where a Deed of Sale conveys a physical thing, an assignment conveys a right: a loan owed to you, the proceeds of a contract, a lease interest, or shares of a claim. Assignments are everywhere in commercial practice — factoring of receivables, loan transfers, security arrangements, and the restructuring of obligations — yet a poorly drafted deed can leave the assignee unable to collect or unprotected against the debtor's defenses. This guide explains what the document must contain, its legal basis under the Civil Code, and how to draft one correctly.

What Is a Deed of Assignment?

A Deed of Assignment is a written contract by which the assignor transfers to the assignee all of the assignor's rights, title, and interest in a specified credit, right, or property — typically for consideration. Once perfected, the assignee steps into the shoes of the assignor and acquires the same rights against the debtor or obligor, subject to the defenses the debtor could have raised against the original creditor.

The most common subjects of assignment are credits and receivables (money owed under a loan, sale, or service contract), but the same instrument is used to assign rights under a lease, rights to the proceeds of a contract, intellectual-property rights, and interests in a partnership or joint venture. The deed may be made for a sum of money or simply "for value received," and it may include an irrevocable power of attorney authorizing the assignee to collect directly from the debtor.

When Do You Need a Deed of Assignment?

• Assignment of receivables — a business sells or factors its outstanding invoices or loan receivables to a financier or third party.
• Loan and credit transfers — a lender transfers a borrower's outstanding loan to a new creditor.
• Security arrangements — rights or receivables are assigned to secure another obligation.
• Contractual rights — a party assigns its right to receive payment or performance under an existing contract.
• Estate and family arrangements — an heir or co-owner assigns their share or interest to another.

Legal Basis

The Deed of Assignment is governed primarily by the assignment-of-credit provisions of the Civil Code of the Philippines:

• Civil Code Articles 1624–1627 — An assignment of credit is perfected like a sale, by meeting of the minds. The assignment includes all accessory rights — guaranties, mortgages, pledges, and preferences — unless otherwise stipulated (Art. 1627). As to the debtor, the assignment is binding only from the time the debtor has knowledge of it (Art. 1626).
• Article 1626 — A debtor who pays the original creditor before being notified of the assignment is released from the obligation. This is why written notice to the debtor is essential to protect the assignee.
• Article 1628 — The assignor in good faith warrants the existence and legality of the credit at the time of the sale, but does not warrant the debtor's solvency unless expressly stipulated. This is the basis of the "with recourse" / "without recourse" distinction.
• Articles 1303–1304 (Subrogation) — Related to assignment; the assignee acquires the credit with all the rights appurtenant to it.
• 2004 Rules on Notarial Practice — A notarized deed is a public document, admissible in evidence without further proof of due execution, and notarization (or registration, for registered property) is what makes the instrument effective against third parties.

Required Elements of a Deed of Assignment

A complete and enforceable Deed of Assignment should contain all of the following:

• Identification of the parties — full names, civil status, citizenship, and addresses of the assignor and the assignee.
• Recital of ownership — a WHEREAS clause confirming that the assignor owns and has the right to dispose of the assigned rights, ideally anchored to the underlying instrument (e.g., a loan agreement).
• Consideration — a stated sum of money (in words and figures) or a "for value received" clause.
• Operative words of conveyance — "ASSIGN, TRANSFER, CEDE, and CONVEY."
• Description of the assigned rights — the credit, receivable, or interest described with enough specificity to be identifiable (source contract, amount, debtor).
• Accessory-rights clause — confirming that the assignment carries all interests, penalties, securities, guarantees, and remedies appurtenant to the right.
• Recourse clause — whether the assignment is made with or without recourse to the assignor.
• Warranties — that the rights are valid, existing, and free from liens or adverse claims, and that the assignor has authority to assign.
• Acceptance by the assignee and, where applicable, an irrevocable power of attorney to collect.
• Notice to the debtor/obligor — a clause requiring written notice of the assignment.
• Date and place of execution, signatures, and a notarial acknowledgment block.

Sample Deed of Assignment

Below is a representative excerpt of what a Deed of Assignment looks like. Use Legalia Pro to generate a complete, notary-ready version with your own parties, consideration, and assigned rights filled in.

How to Draft a Deed of Assignment

1. Identify the parties and the underlying instrument. State the assignor's and assignee's full personal circumstances, and anchor the assigned right to its source (e.g., a loan agreement, invoice, or contract) in a WHEREAS recital.
2. State the consideration. Choose a monetary amount (expressed in words and figures) or a "for value received" clause, and acknowledge receipt.
3. Describe the assigned rights with precision. Identify the credit or receivable, the amount, the debtor or obligor, and the source contract so the subject matter is unmistakable.
4. Choose with or without recourse. Decide whether the assignor remains liable if the debtor defaults. "Without recourse" follows the Civil Code default (Art. 1628).
5. Add accessory-rights, warranty, and acceptance clauses. Confirm that securities and remedies pass with the right, warrant clean title, and have the assignee accept the assignment.
6. Provide for notice to the debtor and, if collection is intended, an irrevocable power of attorney in favor of the assignee.
7. Execute and notarize. Sign before a notary public, complete the acknowledgment block, and register where the assigned right involves registered property.

Frequently Asked Questions