The professional indemnity policy issued by the Attorneys Insurance Indemnity Fund is incapable of cession to a third party. A purported cession to the client of a law firm who had lost misappropriated trust funds was declared invalid by the Supreme Court of Appeal.

Contracts can be ceded to third parties if there is no

A cession of rights as security may include rights which only come into existence in future as in the cession of future book debts. The agreement to cede such rights requires no further action on the part of the cedent at the future time when those rights come into existence. They automatically form part of

A debtor who does not receive notice of a cession by the creditor to a third party is protected if the debtor continues to deal with the original creditor.

It is well-known that if the debtor pays the original creditor without notice of a cession the debt is discharged.

Principle not limited to payment


There are good reasons for putting a ‘no-cession’ clause in a contract.  For one, it is binding on a trustee or liquidator of the insolvent creditor.

Personal rights can be ceded

All personal rights can be freely ceded unless they are of a personal nature where a particular person is expected to perform the obligations