Requirements for a Valid Cession: A Comprehensive Overview

Introduction

 

Cession, the legal transfer of personal rights, necessitates the fulfilment of certain requirements to be valid. This article delves into these prerequisites and their implications in property and cession law.

 

Entitlement of the Cedent

 

The fundamental principle in cession is that the cedent must have the right to transfer the personal right. This aligns with the legal maxim “nemo plus iuris ad alium transferre potest quam ipse haberet,” meaning no one can transfer more rights than they possess. Thus, the cedent must either be the holder of the right or authorised by the holder to transfer it.

 

Capability of the Personal Right to Be Ceded

 

Personal rights must be capable of being ceded, with some exceptions:

• Contingent Rights: These rights, though not immediately enforceable, are still capable of being ceded. This includes rights subject to time clauses or suspensive conditions.
• Future Rights: The cession of future rights, or ‘spes’, is contentious. While some courts recognise the transfer of expected future rights, others maintain that actual transfer occurs only once the right comes into existence.
• Non-Transferable Rights: Certain rights, such as claims for maintenance or personal injury, are deemed too personal to be ceded.
• Delectus Personae: If the debtor’s identity is crucial to the creditor, the right cannot be ceded without the debtor’s consent. This often applies in employment contracts where the personal nature of the obligation is significant.

 

Transfer Agreement

 

A cession requires a bilateral transfer agreement between the cedent and the cessionary, marked by mutual intent. The cedent must intend to transfer the right, and the cessionary must intend to accept it. This agreement can be explicit or implied and must be genuine, specifying the nature of the transaction, the rights being transferred, and the parties involved.

 

Formalities in Cession

 

Generally, no formalities are mandated for a valid cession. The transfer can occur without documentation or the debtor’s consent. However, parties may stipulate specific formalities, such as written agreements or document delivery. Exceptions exist, like the statutory requirements for transferring shares or the necessity of written consent for leasing rights.

 

Legality of the Cession

 

A cession is invalid if it contravenes statutes, common law, public policy, or moral standards. Examples include:

• Statutory Prohibitions: Certain rights, like pension claims, are non-assignable by law.
• Fraudulent Cessions: Transfers intended to defraud creditors are unlawful.
• Immoral or Public Policy Violations: Courts may void cessions with purposes deemed against public policy, such as manipulating claims to impede debt recovery.

 

Absence of Prejudice to the Debtor

 

Cession should not disadvantage the debtor by increasing their burden. Key protections include:

• Prohibition of Claim Splitting: Claims must be transferred wholly, not piecemeal, to avoid burdening the debtor with multiple lawsuits.
• Protection Against Mala Fide Cessions: Courts can delay judgment on a cessionary’s claim if the cession was made in bad faith to deprive the debtor of counter-claim opportunities.

 

Conclusion

 

Understanding the requirements for a valid cession is crucial for legal practitioners and parties involved in the transfer of personal rights. The principles discussed ensure that cessions are conducted legally and ethically, protecting the interests of all parties involved. Contact an expert at Schoemanlaw Inc.