How is an Assignment of Claim Perfected Against the Obligor ("Saimusha Taikō Yōken") in Japan?

Japanese Attorney at Law - Bengoshi L.L.

• 11 min read

The assignment of a claim ("Saiken Jōto" - 債権譲渡) in Japan, while fundamentally a contract between the assignor (original creditor) and the assignee (new creditor), requires additional steps to make it effective and enforceable against the obligor (the party who owes the debt). Without these steps, the obligor may not be legally bound to recognize the assignee as the new creditor, potentially leading to payment to the wrong party or disputes over the claim's ownership. The legal concept governing this critical aspect is known as "Saimusha Taikō Yōken" (債務者対抗要件), which translates to "perfection requirements against the obligor." These requirements are primarily detailed in Article 467, paragraph 1 of the Japanese Civil Code (Minpō - 民法).

The Meaning and Nature of "Saimusha Taikō Yōken"

Purpose: Protecting the Obligor

The primary objective of establishing perfection requirements against the obligor is to protect the obligor. An assignment of a claim occurs without the obligor's direct participation or necessarily their initial knowledge. If the law did not provide a mechanism to formally apprise the obligor of this change, they would be exposed to significant risks, including:

  1. Uncertainty as to the True Creditor: The obligor might be unsure to whom they should render performance.
  2. Risk of Double Payment: The obligor might pay the original assignor, only to be subsequently faced with a demand for payment from the assignee.
  3. Loss of Defenses: The obligor might lose the ability to assert defenses or set-off rights they possessed against the original assignor if they are unaware of the assignment and the identity of the new creditor.

Article 467(1) of the Civil Code addresses these concerns by ensuring that the obligor is formally and reliably informed of the transfer of the claim before they are legally obliged to treat the assignee as the new creditor.

Core Mechanisms: Notice by Assignor or Acknowledgment by Obligor

Article 467(1) stipulates that an assignment of a nominative claim (a claim where the creditor is specifically named) cannot be asserted against the obligor or any other third party unless one of two conditions is met:

  1. Notice (通知 - tsūchi) of the assignment is given by the assignor to the obligor; OR
  2. The obligor gives their acknowledgment (承諾 - shōdaku) of the assignment.

Until one of these actions is completed in the prescribed manner, the assignee generally cannot directly enforce the assigned claim against the obligor, and the obligor can continue to treat the assignor as the rightful creditor. (While Article 467(1) mentions "any other third party," Article 467(2) provides more specific rules for perfection against other third parties like subsequent assignees or attaching creditors, requiring a "fixed date stamp," which will be discussed in a separate article. This article focuses on perfection against the obligor).

Mandatory Nature of Article 467(1) ("Kyōkō Hōki Sei")

The provisions of Article 467(1) concerning notice or acknowledgment are generally considered to be mandatory law (強行法規 - kyōkō hōki) in Japanese jurisprudence. This means that parties cannot typically contract out of these fundamental requirements for making an assignment effective against the obligor.

While some legal scholars have argued that since these requirements primarily protect the obligor, the obligor should be free to waive them by prior agreement (e.g., consenting in advance to assignments without specific notice), the prevailing judicial view and strong scholarly opinion lean towards their mandatory nature. This is partly because the notice/acknowledgment against the obligor also serves as a foundational element for the broader system of perfecting assignments against all third parties (which requires these acts to bear a fixed date stamp). Treating Article 467(1) as mandatory helps ensure a stable, predictable, and reliable system for determining the ownership and enforceability of assigned claims. Old Supreme Court of Judicature decisions (e.g., February 9, 1921; March 12, 1921) support this mandatory interpretation.

Burden of Pleading and Proof

In legal proceedings where an assignee seeks to enforce an assigned claim against the obligor:

  1. The assignee must first plead and prove the underlying basis of the claim (e.g., the original contract between the assignor and the obligor) and the valid assignment agreement between the assignor and the assignee.
  2. If the obligor then raises the defense that the requirements for perfection against the obligor (Saimusha Taikō Yōken) have not been met (i.e., they have not received proper notice from the assignor or have not given their acknowledgment), the burden shifts to the assignee to prove that such perfection has indeed occurred.

If an assignment has occurred between the assignor and assignee but has not been perfected against the obligor:

  1. Assignee Cannot Directly Demand Performance: The assignee cannot legally compel the obligor to perform the obligation to them. The obligor can validly refuse such a demand.
  2. Obligor Can Validly Perform to the Assignor: The obligor is entitled to continue treating the original assignor as the creditor. If the obligor performs to the assignor (e.g., pays the debt), this performance is valid and discharges the obligation, even as against the assignee. The assignee's recourse in such a case would be against the assignor (e.g., for recovery of the payment received, based on their assignment agreement or unjust enrichment).
  3. Obligor May Choose to Perform to the Assignee: Even if formal perfection against the obligor has not occurred, if the obligor is aware of the assignment (e.g., through informal notification or from the assignee themselves) and chooses to perform to the assignee, such performance is generally considered valid and will discharge the obligation. In this scenario, the obligor is effectively waiving the formal perfection requirement.

Notice of Assignment of Claim ("Saiken Jōto no Tsūchi")

One of the two primary methods for perfecting an assignment against the obligor is by a notice of assignment.

Nature of the Notice: An Expression of Concept ("Kannen no Tsūchi")

The notice of assignment is not a juristic act (法律行為 - hōritsu kōi) that creates or alters rights in itself. Rather, it is classified as an "expression of concept" (観念の通知 - kannen no tsūchi) or a "notification of a fact." It is a quasi-juristic act (準法律行為 - jun-hōritsu kōi) that informs the obligor of the completed fact that the claim has been transferred.

For the notice to be effective as Saimusha Taikō Yōken, it must reach (到達 - tōtatsu) the obligor. This means it must be delivered to the obligor in such a way that they are placed in a position where they can become aware of its contents. Contractual clauses that deem notice to have arrived if the obligor failed to report a change of address, for example, may not be sufficient to override the actual arrival requirement for a claim assignment notice, given its critical role in determining rights. A Tokyo High Court decision dated March 24, 2015, supports a cautious approach to such deemed arrival clauses in this context.

Notice Must Originate From the Assignor ("Jōto'nin kara no Tsūchi")

A crucial requirement under Article 467(1) is that the notice of assignment must be given by the assignor (the original creditor) or their duly authorized agent or representative (e.g., a statutory agent if the assignor is a minor, or a liquidator if the assignor is a company undergoing liquidation).

  • Rationale: This rule is designed to protect the obligor from potentially fraudulent or erroneous claims of assignment. If the assignee alone could give legally binding notice, the obligor would face a heightened risk of being deceived into paying the wrong party. Notice emanating from the assignor provides a degree of assurance to the obligor about the authenticity of the transfer.
  • Assignee's Inability to Give Notice Directly (General Rule): The assignee themselves generally cannot give the formal notice that satisfies Article 467(1). Furthermore, the assignee typically cannot use the creditor's right of subrogation (Article 423 of the Civil Code, which allows a creditor to exercise rights of their own debtor) to compel a reluctant assignor to give notice, or to give notice on the assignor's behalf through that mechanism. The assignee's primary recourse is to demand that the assignor fulfill their (often implied) contractual or statutory duty to provide the necessary notice to the obligor.
  • Notice by Assignee as Assignor's Agent or Messenger: However, it is permissible, and indeed common in practice, for the assignee to deliver the notice to the obligor, provided they are acting clearly as an agent or messenger of the assignor, and the notice itself unequivocally originates from and is made in the name of the assignor.

Content of the Notice ("Tsūchi no Naiyō")

The notice of assignment must contain sufficient information to achieve its purpose of informing the obligor about the transfer. It should clearly identify:

  1. The Specific Claim(s) Being Assigned: The claim(s) must be described with enough particularity for the obligor to understand which of their obligations has been transferred. This could be by reference to a contract number, invoice number, date, amount, or other defining characteristics.
  2. The Fact of Assignment: It must clearly state that the identified claim(s) has been assigned.
  3. The Identity of the Assignee: The notice must clearly name the new creditor to whom the claim has been transferred, so the obligor knows whom to pay in the future.

While minor details of the claim might not always need to be reiterated if the claim is otherwise unambiguously identified, the notice must not be so vague as to leave the obligor in doubt about which specific obligations are affected or who the new creditor is.

Timing of the Notice ("Tsūchi no Jiki")

  • General Rule: After Assignment: The notice of assignment should logically be given after the assignment agreement between the assignor and assignee has been concluded, as it is a notification of a completed transfer.
  • Notice Prior to Actual Assignment ("Jōto Mae no Tsūchi"): A notice given to the obligor before the assignment agreement has actually been made (i.e., a notice of a merely contemplated or future assignment) is generally considered ineffective as Saimusha Taikō Yōken. The perfection mechanism is designed to perfect an existing transfer, not a potential future one. An old Supreme Court of Judicature decision (July 10, 1915) supports this.
  • Notice for Assignment of Future Claims ("Shōrai Saiken"): As discussed in a previous article, future claims (claims not yet in existence) are assignable under Japanese law (Article 466-6). In such cases, Article 467(1) explicitly allows for the notice of assignment of these future claims to be given at the time the agreement to assign them is made, even before the claims themselves have materialized. However, the perfection against the obligor with respect to a specific future claim typically becomes fully effective only when that claim actually comes into existence and falls within the defined scope of the prior notice. (Supreme Court of Judicature, December 28, 1934).

Notice for Assignment of Collective Claims ("Shūgō Saiken Jōto")

When a pool of existing and/or future claims is assigned collectively (e.g., all accounts receivable of a business), a "comprehensive notice" (包括的通知 - hōkatsuteki tsūchi) to the relevant obligor(s) can be effective as Saimusha Taikō Yōken. This is analogous to the concept of a comprehensive "possession by instruction" (占有改定 - sen'yū kaitei) used for perfecting security interests over collective movables.

Such a comprehensive notice must clearly define the scope of the assigned claims (e.g., by reference to the underlying types of transactions, the period of accrual, the specific business division involved, etc.) so that the obligor(s) can reasonably identify which of their debts are now payable to the assignee. If the notice is overly vague, failing to provide a clear basis for identifying the transferred claims, it may be deemed insufficient to perfect the assignment against the obligor. For assignments of future claims where the specific obligors are not yet identified (e.g., assignment of all future receivables from a new business line), perfection against those future obligors will typically require individual notices once those obligors and their specific debts become known, unless a broader notification mechanism (like public notice, if applicable under special laws like the Act on Special Rules for Assignment of Movables and Claims) is utilized and effective against them.

Invalid or Non-Existent Assignment Agreement

If the underlying assignment agreement between the assignor and assignee is void (e.g., due to illegality or lack of capacity) or was never actually formed (e.g., lack of mutual assent), then a notice of assignment, even if formally given by the assignor, is essentially perfecting a nullity. Since there is no valid transfer of the claim to the assignee, the assignee acquires no rights, and the notice has no substantive assignment to make effective against the obligor.

However, if the obligor, reasonably relying on a notice that appeared to be from the true creditor (even if the underlying assignment was flawed), pays the purported assignee in good faith and without negligence, the obligor might still be protected from having to pay again under the principles of Article 478 (performance to an apparent entitled person).

The second method for perfecting an assignment against the obligor is by obtaining the obligor's acknowledgment or consent (shōdaku - 承諾) to the assignment.

Nature of Acknowledgment: An Expression of Concept

Similar to a notice of assignment, the obligor's acknowledgment is also considered an "expression of concept" or a notification of a fact. It is the obligor's formal recognition that they are aware of the assignment of the claim. It is not, in itself, an act that creates new contractual obligations for the obligor (beyond recognizing the change of creditor), nor does it typically create the assignment itself (which is effected by the assignor-assignee agreement). It is a quasi-juristic act. An acknowledgment can be given by the obligor or their duly authorized agent.

Party to Whom Acknowledgment is Made ("Shōdaku no Aitekata")

The obligor's acknowledgment can be effectively given to either the assignor or the assignee. An acknowledgment communicated to either party is sufficient to perfect the assignment against the obligor. This flexibility is because the primary purpose—ensuring the obligor is definitively aware of the transfer—is achieved regardless of which party receives the acknowledgment (Supreme Court of Judicature, October 2, 1917).

Timing of Acknowledgment ("Shōdaku no Jiki")

  1. Simultaneous with or After Assignment: An acknowledgment can be given at the same time as the assignment agreement is made or at any point thereafter.
  2. Acknowledgment Prior to Assignment (Pre-Assignment Consent): Unlike notice, an acknowledgment given by the obligor before the assignment has actually taken place can be valid as Saimusha Taikō Yōken, provided that both the specific claim to be assigned and the specific assignee are clearly identified in the acknowledgment (Supreme Court, May 29, 1953).
  3. Acknowledgment Without Specifying the Assignee (More Complex): There has been historical debate regarding the validity of a pre-assignment acknowledgment by the obligor that does not specify the identity of the future assignee (e.g., a general consent in a contract clause stating "this claim may be assigned").
    • Older, more lenient scholarly views often considered such general pre-consents sufficient for perfection against the obligor if the claim itself was clearly identified. The reasoning was that the obligor had acknowledged the assignability of the debt.
    • However, a more critical modern perspective, especially considering that the obligor's acknowledgment (particularly if it bears a fixed date stamp) also forms the basis for perfection against third parties and plays a role in determining priority in cases of multiple assignments or attachments, tends to require more specificity. For an acknowledgment to robustly serve these broader perfection functions, identifying the specific assignee is often considered necessary. A Supreme Court decision on June 30, 1983, concerning the perfection of a pledge over a claim (where Article 467 is applied mutatis mutandis), suggested that for effective third-party perfection, a pre-pledge consent from the obligor of the pledged claim needed to identify the specific pledgee.
  4. Pre-Approved Assignments in Standard Form Contracts: Many standard form contracts (e.g., consumer credit agreements, equipment leases) contain clauses where the obligor (customer) gives advance consent to the assignment of their payment obligations by the original creditor (e.g., finance company) to other financial institutions or entities. While such clauses are generally effective as a waiver of the obligor's right to object to the assignment itself or as a waiver of certain defenses they might have against the assignor, their sufficiency as a standalone "acknowledgment" for all purposes of Article 467(1) (especially for establishing priority against other third parties if the clause lacks specificity and a fixed date stamp) can be nuanced and may depend on the precise wording and context.

Absence of Acknowledgment

If no valid acknowledgment is given by the obligor (and no effective notice is given by the assignor), the Saimusha Taikō Yōken are not met. In this situation, the assignee cannot directly enforce the assigned claim against the obligor, and the obligor can continue to validly discharge their debt by performing to the original assignor.

Conclusion

The "Saimusha Taikō Yōken" under Article 467(1) of the Japanese Civil Code are indispensable for an assignee to effectively assert their rights to an assigned claim against the obligor. This perfection, achieved either through a formal notice of assignment originating from the assignor or by the obligor's acknowledgment of the transfer, serves the critical function of protecting the obligor from the uncertainties and risks associated with a change in creditor to which they were not an original party. For businesses involved in assigning or acquiring claims, or for obligors navigating their payment responsibilities, a clear understanding of who must give notice or acknowledgment, to whom, with what content, and by when, is fundamental to ensuring that rights are properly established and obligations are correctly discharged under Japanese law.