Assignability Considerations

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The PPSAs in each province and territory of Canada other than the Province of Québec provide that a contractual restriction on the assignment of a receivable is unenforceable against third parties, as long as the entirety of the receivable is transferred, and not merely an interest in the receivable. Accordingly, contractual restrictions on assignment will generally not render an assignment void; however, an assignment of a receivable in breach of a contractual restriction can expose the assignor to a breach of contract claim by the obligor.

While there is no similar “override” or “anti-assignment” provision in the Province of Québec, the CCQ does include a set of rules that are applicable to provisions that restrict the free disposition of certain property. As a result, there is a legal basis for the position that an assignment made in breach of an anti-assignment clause does not invalidate the assignment as between the