Document background
An Accounts Receivable Assignment Agreement is a crucial document in UAE commercial transactions, particularly used in trade finance, factoring, and corporate financing arrangements. It enables businesses to monetize their receivables by legally transferring their right to collect payment from customers to another party, typically a financial institution or factoring company. The agreement must comply with UAE Civil Code (Federal Law No. 5 of 1985) and Commercial Transactions Law (Federal Law No. 18 of 1993), which set out specific requirements for valid assignments. This document is commonly used when companies need to improve their cash flow, secure financing, or streamline their receivables management. It includes detailed provisions on the scope of assignment, purchase price calculations, representations about the validity of receivables, and mechanisms for perfecting the assignment under UAE law.
