Changes on the side of the debtor

In the context of legal relationships, changing the subject of the obligation on the part of the debtor can be done in several ways. The obligation of a debtor under a contract can be transferred to a third party – by assuming debt, accessing debt, or assuming fulfillment.

Debt assignment and assumption agreement

By assuming debt, the acquirer takes the place of the previous debtor, and the latter is released from his obligations. The debt is assumed by a contract between the debtor and the acquierer, if the creditor has agreed to it. So, although the parties to the debt assumption contract are the debtor and the acquirer, the contract is not valid and there is no change on the part of the debtor, if the creditor does not agree to it. Until the creditor agrees, or if it happens that the creditor refuses to give his or her consent, the debt assumption contract has the effect of a fulfilment assumption agreement. The creditor may give his consent at any time, however, if the acquirer was indebted at the time of the creditor’s consent to the debt assumption contract, the previous debtor shall not be released – but the debt assumption contract shall have the effect of a debt accessing contract, provided that the creditor did not know or should have known of the acquirer’s indebtedness.

The change of the debtor does not change the content of the obligation that previously existed between the previous debtor and the creditor. Subsidiary rights with the claim remain intact (for example, a contractual penalty), except for deposit and guarantees of third parties that are transferred only with their consent, and interest until the date of assumption of debt – unless otherwise agreed.

The acquirer may lodge all the complaints of the previous debtor in the legal relationship from which the debt originates, as well as his own complaints, while he may not lodge the personal complaints of the previous debtor or the complaints of his own relationship with the previous debtor, which was  the basis of the debt assumption.

Debt access contract

The debt access contract is a contract concluded by a creditor and a third party, whereby the third party undertakes to fulfill the obligation of the debtor and thus enters an obligation next to the debtor. The validity of a debt access contract does not require the consent of the debtor, nor can the debtor prevent the third party from paying the debt if the obligation is due. Given that the main debtor does not participate in its conclusion, he is not released from the obligation. The creditor may seek a compesantion from the main debtor as well as from the person who has accessed the debt. The fact that previous debtor is not released from the obligation is also a key difference between a debt assumption contract and a debt access contract. It has already been noted that the debt assumption agreement, to which the creditor gave his consent when the debtor was indebted and which the creditor did not know or need to know about, has the effect of a debt access contract. A debt access contract is also informal, meaning that it can be concluded in an oral form or through the implicit conduct of a creditor by which he accepts a third party’s debt access statement.

Fulfilment assumption contract

The fulfilment assumption contract is concluded between the debtor and the third party who undertakes to fulfil his debt to the creditor. The validity of this contract does not require the consent of the creditor, nor does this contract result in a change of person on the debtor’s side. In case that the acquirer fails to fulfil the obligation to the creditor on time and the latter seeks fulfilment from the debtor, the third party is responsible for fulfilment only to the debtor and not to the creditor. The creditor cannot ask from the acquirer to fulfil the debt. However, the creditor is generally obliged to receive the fulfilment of the debt from a third party so that he does not fall into arrearage with the debtor. Let us mention that the Law assigns the legal effects of the fulfilment assumption contract to the debt assumption contract until the creditor gives his or her consent or refuses to give a consent to the assumption of debt.

Learn more about it at: Obligations Act