Transfer of Obligations

The obligation being regarded as a bond between determinate persons could not be transferred so as to be available for or against others. This is still true of certain classes of rights in personam which are of so personal a nature as to be obviously available only as between the original contracting parties, e.g., many contracts of service.

Within certain limits, however, transfers of rights and liabilities were early admitted as taking place upon death, the heirs being liable for the debts of the deceased and entitled to sue for credits due to him.

The transmissibility of obligations inter vivos is, however, of greater interest for Egyptian students of European law, and it may at once he remarked that it is only slowly that such transferability has developed. The right to sue must always be carefully distinguished from liability to be sued The latter, as a general rule, cannot be transferred inter vivos, a provision easily comprehensible is generally indifferent, the personality of the debtor cons frequently the motive for the creditor's willingness to enter into the obligations.

Although the right of a creditor to assign his claim is generally admitted in modern law, such assignment is usually regarded as binding only between the assignor and assignee until notice of the assignor and assignee has been given to the debtor. The Egyptian law, following upon this point the Islamic law, is even more strict, since it does not recognize an assignment as good unless the debtor has consented.

The highest degree of transferability of rights in personam is reached in the case of negotiable instruments drawn up as evidence of a debt, and the right to receive payment of the debt is held to pass by the handing over (delivery) of the instrument with or without endorsement. The debt is identified with the document itself, so that the delivery of the instrument operates as a delivery of the debt and a consequent change of ownership. Moreover, the person who is for the time being the holder in good faith of the instrument has a right to be paid the amount due irrespective of defects in T his title to hold it. Thus, he may obtain by his possession a better title than the person from i whom he received it, just as a possessor of movables in good faith will have a good title to the nownership although the person from whom he received the thing was not really the owner. The A negotiable instrument is the product of commercial needs and the discussion of its trade uses belongs to political economy. The best-known instruments of this kind are bills of exchange. These take the form of orders drawn upon a debtor directing him to pay money to a person named or to such other person as this person may direct.

Discharge of obligations

The Egyptian code mentions seven methods by which obligations may be extinguished, namely, (2001 performance; (2) Dissolution; (3) Release; (4) Novation; (5) compensation; (6) Confusion merger; (7) Prescription A brief explanation of the meaning of these terms will suffice here.

1. Performance :

Performance consists in doing the observing the forbearances required on the person bound. In the commonest case it consists of payment of money, and it is a wellrecognized rule of Roman, French, and Egyptian law that payment may be made by some person other than the debtor and even against his wish. A third party who pays the debt may, however, obtain the right to recover the amount paid from the real debtor, so that the effect of such payment is merely. to change the person of the creditor. This right of reconrse is said to be due to subrogation. Subrogation thus causes a transfer of the creditor's rights to the person who has paid. The latter stands hence-forth in the original creditor's shoes for the purpose of obtaining payment.

2. Dissolution :

By this is meant the occurrence of some event which excuses performance and consequently dissolves the legal bond between the parties. Impossibility of performance arising subsequent to the contract will thus annual the obligation to his  perform

3. Release :

The release by the creditor of the debtor from his obligation will naturally free him from liability. The mere agreement of the parties to a discharge of the obligation has not, however, always been regarded as sufficient, since, in the case of formal contracts, it was requisite that the release to be effective should follow the same as were essential to

the creation of the obligation.

4. Novation :

Novation consists of the extinction of an obligation by the creation of a new one in its place. The creditor and debtor may, for example, annul the previous obligation by mutually agreeing to substitute a new one for it, or the creditor may agree with a third person that he shall become debtor in the place of the original debtor so that the obligation of the new debtor shall be substituted for that of the old one. ow It must be noted that the operation known as  novation differs radically from transfer of an obligation, though in some of its forms it appears to produce similar results. Novation involves a new obligation which is substituted for the old one; transfer, on the other hand, keeps the old . obligation on foot, merely altering the persons who

are bound by it.

5. Compensation.

The English word "compensation is here used as equivalent to the French compensation.

Compensation extinguishes debts by the mutual setting off of the liabilities of each party against one another. In French and Egyptian law it - operates by effect of law (de plein driot) even without the knowledge of the parties, the two debts canceling each other rateably from the moment at which they co-exist.

6- Confusion :

Where a person unites in himself the two capacities of creditor and debtor the obligation is said to be extinguished by merger. The French term is confusion, and in the English translation the Egyptian code the English word "confusion" is used in this sense.

7. Prescription :

The nature of prescription has already been explained, and a distinction was then drawn between acquistive prescription, which is a title to rights, and extinctive prescription, which merely extinguishes the preexisting right; the right extinguished by prescription in the case of obligations is not the obligation itself, but merely the right of action upon it; it is the remedial not the antecedent right which ceases to exist. A right which has become unenforceable because action upon it is barred by lapse of time furnishes an 90 example of an imperfect right or natural obligation.