Equitable assignment (Banking & Finance) meaning

An equitable assignment is the transfer of receivables or choses in action that does not meet the statutory requirements for a legal assignment but is enforceable in equity. In England and Wales (and broadly in Northern Ireland), section 136 of the law of Property Act 1925 requires a legal assignment to be in writing and express written notice to be given to the debtor. Where those conditions are not satisfied — for example because notice has not been given, the transfer is not in writing, only part of a debt is assigned, or future receivables are involved — the assignment is equitable. Receivables purchase agreements, invoice discounting and securitisations use equitable assignments, with legal title perfected by serving notice. Key effects: the assignee takes equitable title; until notified the debtor may discharge by paying the assignor; the assignee usually sues in the assignor’s name or joins them; rights are subject to equities and set-off arising before notice; and priority commonly follows the order of debtor notice. In Ireland, a similar distinction applies under Judicature legislation and case law. In Scotland, the analogous concept is assignation, completed by intimation or registration under the Moveable Transactions (Scotland) Act 2023.