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    Question

    What action must the assignee take upon accepting an assignment of receivables that serve as security for a loan from a bank or creditor, provided the assignor has given notice of the encumbrance to the assignee as per the Factoring Regulation Act?

    A The assignee must reject the assignment Correct Answer Incorrect Answer
    B The assignee must pay the consideration directly to the assignor Correct Answer Incorrect Answer
    C The assignee must notify the bank or creditor of the assignment Correct Answer Incorrect Answer
    D The assignee must seek legal counsel before proceeding Correct Answer Incorrect Answer
    E The assignee must pay the consideration to the bank or creditor Correct Answer Incorrect Answer

    Solution

    Section 7. Assignment of receivables: (3) Any assignment of receivables which constitute security for repayment of any loan advanced by any Bank or other creditor and if the assignor has given notice of such encumbrance to the assignee, then on accepting assignment of such receivable, the assignee shall pay the consideration for such assignment to the Bank or the creditor, as the case may be.

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