Civil way: 14 December 2018

So you are a small or medium sized business and you need the cash flowing in. Then assign the right to future payment of your invoices to a finance company. Around 40,000 businesses in the UK use invoice finance at a typical cost of 20% of value. It would be more but for the common contractual prohibition against assignment.

To the rescue come the Business Contract Terms (Assignment of Receivables) Regulations 2018 (SI 2018/1254) (made under s 1 of the Small Business, Enterprise and Employment Act 2015) which apply to any contractual term made on or after 31 December 2018, five years since the idea of legislation in the area was floated with a government discussion paper. The regulations extend to England, Wales and Northern Island. Any term prohibiting or imposing a condition on the assignment of a receivable (invoices and other rights to be paid money under a contract) is to have no effect.