Section 4: Delegation

Delegation is a transaction by which one person, the delegator, obtains from another, the delegate, an obligation to a third, the delegatee, who accepts it as a debtor. The delegate may not, unless otherwise stipulated, set up against the delegatee any exception drawn from its relationship with the delegator or from the relationship between the delegator and the delegatee.

Where the delegator is a debtor of the delegatee and the delegatee’s intention to discharge the delegator is expressly stated in the deed, the delegation constitutes novation. However, the delegator remains bound if it has expressly undertaken to guarantee the future solvency of the delegate or if the delegate is subject to a procedure for the discharge of its debts at the time of the delegation.

Where the delegator is indebted to the delegatee but the delegatee has not discharged him of his debt, the delegation gives the delegatee a second debtor. Payment made by one of the two debtors discharges the other, to the same extent.

Where the delegating party is a creditor of the delegatee, its claim is extinguished only by the performance of the delegatee’s obligation to the delegatee and in due proportion.

The mere indication by the debtor of a person designated to pay in his place does not entail novation or delegation. The same applies to the mere indication made by the creditor of a person designated to receive payment on his behalf.