Bill of Sale in UK Law

The essence of a floating charge is that it is a charge, not on any particular asset, but on a fluctuating body of assets which remain under the management and control of the chargor, and which the chargor has the right to withdraw from the security despite the existence of the charge. The essence of a fixed charge is that the charge is on a particular asset or class of assets which the chargor cannot deal with free from the charge without the consent of the chargee.

However, I do not think that necessarily means that the netting off was ineffective. Having paid ABC for the debt pursuant to the terms of the Debt Purchase Agreement, Brasoil had acquired the right to require ABC to complete the transfer of the legal title and had thereby become an assignee of the debt in equity.

The nature and content of the MOA suggest that the parties did intend it to create legal relations, even if only of a provisional nature, but whether it was effective to achieve anything more than an agreed structure for the proposed transaction is another matter. The difficulty arises from the nature of the obligations it purported to impose.

On these points I can be brief because I agree with Millett LJ for the reasons which he gave. I do not see how a right to sell an asset belonging to a debtor and appropriate the proceeds to payment of the debt can be anything other than a charge.