The Business Contract Terms (Assignment of Receivables) Regulations 2018
| Jurisdiction | UK Non-devolved |
| Citation | SI 2018/1254 |
| Year | 2018 |
2018 No. 1254
Contracts
The Business Contract Terms (Assignment of Receivables) Regulations 2018
Made 23th November 2018
Coming into force in accordance with regulation 1
The Secretary of State, in exercise of the powers conferred by sections 1 and 161(2) of the Small Business, Enterprise and Employment Act 20151, makes the following Regulations:
In accordance with section 161(4) of the Small Business, Enterprise and Employment Act 2015, a draft of this instrument was laid before Parliament and approved by resolution of each House of Parliament.
Citation, commencement, interpretation and application
1.—(1) These Regulations may be cited as the Business Contract Terms (Assignment of Receivables) Regulations 2018 and shall come into force on the day after the day on which they are made.
(2) These Regulations apply to any term in a contract entered into on or after 31 December 2018.
(3) In these Regulations—
“firm” has the same meaning as in the Companies Act 20062;
“intangible assets” includes electricity and data which are produced and supplied in digital form;
“licensee”, in relation to a petroleum licence, means the person to whom a petroleum licence is granted, their personal representatives and any person to whom the rights conferred by that licence may lawfully be assigned;
“large group” means a group that is not a small group or a medium-sized group (within the meanings given by the Companies Act 20063or by that Act as applied with modifications by the Limited Liability Partnerships (Accounts and Audit) (Application of the Companies Act 2006) Regulations 20084);
“LLP” means a limited liability partnership formed under the Limited Liability Partnerships Act 20005;
“petroleum licence” means a licence granted under section 2 of the Petroleum (Production) Act 19346or under section 3 of the Petroleum Act 19987;
“prescribed financial services” means a regulated agreement within the meaning of the Consumer Credit Act 19748or any financial service within the meaning of section 2 of the Small Business, Enterprise and Employment Act 2015; and
“receivable” is a right (whether or not earned by performance) to be paid any amount under a contract (other than a contract mentioned in regulation 4) for the supply of goods, services or intangible assets (and in relation to a receivable, “supplier” means the supplier of those goods, services or intangible assets to whom that amount is payable and “debtor” means the person liable to pay that amount).
(4) These Regulations have effect notwithstanding any contract term which applies or purports to apply the law of Scotland or some country outside the United Kingdom, where the term appears to the court or arbitrator or arbiter to have been imposed wholly or mainly for the purpose of enabling the party imposing it to evade the operation of these Regulations.
Effect of a non-assignment of receivables term
2.—(1) Subject to regulations 3 and 4, a term in a contract has no effect to the extent that it prohibits or imposes a condition, or other restriction, on the assignment of a receivable arising under that contract or any other contract between the same parties.
(2) A term in a contract which imposes a condition or other restriction on the assignment of a receivable includes a term which prevents a person to whom a receivable is assigned from determining the validity or value of the receivable or their ability to enforce the receivable.
(3) For the purposes of paragraph (2), a term prevents a person to whom a receivable is assigned from determining the validity or value of the receivable or their ability to enforce the receivable if the condition or other restriction prevents that person from obtaining—
(a)
(a) the names and addresses of the parties to the contract;
(b)
(b) the name and address of the person who on behalf of the debtor can confirm the validity and amount of the receivable;
(c)
(c) the VAT registration number of the debtor and of the supplier;
(d)
(d) the date on which the goods, services or intangible assets that give rise to the receivable are supplied;
(e)
(e) a description sufficient to identify the goods, services or intangible assets that give rise to the receivable (including the quantity of goods or intangible assets, or the extent of services, the unit price, the rate of VAT and the amount payable, excluding VAT);
(f)
(f) the date and number of the invoice for the goods, services or intangible assets that give rise to the receivable and any credit note related to the invoice (and the reason for issuing the credit note);
(g)
(g) the amount, basis or rate of any applicable discount;
(h)
(h) the total amount of VAT chargeable;
(i)
(i) the reason for any VAT zero-rating or VAT exemption;
(j)
(j) details of any term in the contract to which regulation 2(1) applies;
(k)
(k) the credit period for paying the receivable;
(l)
(l) evidence of the performance of that part of the contract (or other contract between the parties) which gives rise to the receivable; or
(m)
(m) particulars and evidence of any potential defence or set-off by a party to the contract.
Exception for suppliers who are large enterprises or special purpose vehicles
3.—(1) Regulation 2 does not apply and accordingly a term mentioned in that regulation does have effect in relation to the assignment of a receivable if at the time of the assignment the supplier is a large enterprise or a special purpose vehicle.
(2) A supplier is a large enterprise unless it satisfies one of the conditions in paragraph (3) and in paragraph (3) “relevant financial year” means the last financial year (before the date on which the receivable is assigned) in respect of which the supplier has filed accounts.
(3) The conditions in this paragraph are—
(a)
(a) the supplier is an individual, a partnership (other than an LLP or a limited partnership) or an unincorporated association;
(b)
(b) the supplier is a company to which the small companies regime (within the meaning given by sections 381 to 384 of the Companies Act 2006) applied in the relevant financial year and which was not a member of a large group in the relevant financial year;
(c)
(c) the supplier is a company which qualified as medium-sized (within the meaning given by sections 465 to 467 of the Companies Act 2006) in respect of the relevant...
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