Assignment of Construction Debt and Right of Set-Off
Mr. A entered into a construction contract with Mr. B for a contract price of 300,000 baht. Subsequently, Mr. A assigned the right to receive such payment to Mr. C in writing. During the construction period, Mr. A duly notified Mr. B of the assignment, and Mr. B acknowledged receipt thereof.
Upon completion of the construction, Mr. B deducted a sum as liquidated damages for delay of 10 days and paid the remaining balance of 299,000 baht.
Under the Civil and Commercial Code, Section 306, the assignment is valid and enforceable against the debtor upon notification, regardless of the debtor’s consent. However, the debtor retains the right to raise any defense or set-off existing prior to or at the time of notification.
Accordingly, Mr. B is entitled to deduct damages for delay but remains obligated to pay the remaining balance. Pursuant to Section 315, Mr. C, as assignee, is entitled to claim the outstanding amount of 299,000 baht from Mr. B.