Expansion of Applicable Sphere: A way to Unif

iously, the UNIDROIT Convention would apply when the receivables assigned are arising from contracts of sale of goods and supply of services.

Meanwhile, article 2(a) of the UNCITRAL Convention, when defining “assignment”, also defines “receivables” as “an undivided interest in the assignor’s contractual right to payment of a monetary sum”. The scope of any “contractual right” is a rather broad scope, which is followed by a detail list of exclusions and limitations under which the convention does not apply. According to article 4 of the UNCITRAL Convention,

(1) The convention does not apply to assignment to an individual for his or her personal, family or household purposes;

We could find the very word in article 1(2) of UNIDROIT Convention, where when limits receivables to the field as “arising from contracts of sale of goods made between the supplier and its customers”, it excludes “those for the sale of goods bought primarily for their personal, family or household use”. But on closer examination we would find the exclusion contained in the two conventions is not the same: the UNIDROIT Convent

ion excludes the assignment of consumer receivables from its sphere of application while the UNCITRAL Convention excludes assignment made for consumer purposes. The four kinds of possible relations are illustrated in the following chart:

Receivables Assignment Which convention may govern
Consumer Receivables For consumer purpose Neither
Consumer Receivables For Commercial purpose UNCITRAL Convention
Commercial Receivables For consumer purpose UNIDROIT Convention
Commercial Receivables For Commercial purpose Both

The first situation is not difficult to understand where the consumer receivables are assigned for consumer purpose. It’s a general practice that international convention does not regulate on pure personal matters, let alone the UNCITRAL is an organization under the United States concentrating on international trade matters; Under the second situation, where consumer receivables are assigned for commercial purpose, it cannot be governed by the UNIDROIT Convention, but still could be subject to the UNCITRAL Convention; Under the third situation, where commercial receivables are assigned for consumer purpose, logically the UNDROIT Convention shall govern, but considering the UNDROIT Convention is a convention on international factoring, where factors are all banks and other financial institutions, the receivables are not possible to be assigned for consumer purpose, so this situation does not exist; Under the last situation where commercial receivables are assigned for commercial purpose, both of the conventions may be applied.

UNIDROIT’s attitude is understandable that banks don’t want consumer receivables, for pressing for payment from individuals is, in anyway troublesome and low profit. Thus exclusion of these consumer receivables is a natural choice. UNCITRAL Convention substitute the exclusion of consumer receivables to exclusion of receivables assigned for consumer purpose, regardless of the receivables is consumer or commercial one, thus expand the sphere of application of the convention. This expansion is justified for receivables, once coming into being, shall be separated from the underlying contract for the sale of goods. No matter the goods are bought for personal purpose or for commercial purpose, debt has come into being. The conv

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