Fill in the factor, carrier and broker or shipper, and get a clean notice of assignment or letter of release built around UCC §9-406. Copy it, print it or download it as text. Free, no signup.
7 to fill
[Factor legal name]
[Factor remit-to address]
Notice of Assignment
[Letter date]
To:
[Account debtor name]
Attn: Accounts Payable
Re: Notice of assignment of accounts of [Carrier legal name] ([Carrier USDOT or MC number])
Please take notice that [Carrier legal name] ("Carrier") has assigned to [Factor legal name] ("Assignee") its accounts for transportation services provided to [Account debtor name], including all amounts now due or to become due, effective [Effective date].
Under Uniform Commercial Code section 9-406(a), after you receive this notification, you may discharge your obligation on these accounts by paying the Assignee, and may not discharge it by paying Carrier. Please make every payment on Carrier's invoices payable to [Factor legal name] and send it only to the address below.
Remit all payments to:
[Factor legal name]
[Factor remit-to address]
This notice applies to every invoice from Carrier, whoever submits it, and remains in effect until you receive a written release signed by [Factor legal name]. Please do not act on any change to these payment instructions, including one that appears to come from Carrier, unless [Factor legal name] confirms it in writing.
If you would like reasonable proof of the assignment, please ask and we will provide it. Please update your payee records and confirm receipt by signing below and returning a copy to [Factor legal name].
Assignee
[Factor legal name]
Byblank
Nameblank
Titleblank
Dateblank
Acknowledged by Carrier (assignor)
[Carrier legal name]
Byblank
Nameblank
Titleblank
Dateblank
Receipt acknowledged by account debtor
[Account debtor name]
Byblank
Nameblank
Titleblank
Dateblank
About this tool
What a notice of assignment does
A notice of assignment (NOA) tells a broker or shipper, the account debtor, that a carrier's invoices have been assigned to a factor and that payment must go to the factor. Under UCC §9-406(a), an account debtor may keep paying the carrier until it receives a notification, authenticated by the carrier or the factor, that the amount due has been assigned and payment is to be made to the assignee. After it receives that notification, it can discharge the debt by paying the factor, and paying the carrier no longer discharges it.
Two more parts of §9-406 shape the letter. A notification is ineffective if it doesn't reasonably identify the rights assigned (§9-406(b)(1)), so name the carrier exactly, with its USDOT and MC numbers. And if the debtor asks, the factor must seasonably furnish reasonable proof of the assignment, or the debtor may keep paying the carrier (§9-406(c)). The NOA guide covers the rest.
When to send it
Send the NOA when you start factoring a carrier, before or with the first invoice you buy on each debtor, and again if a debtor's payables contact or process changes. A debtor that never received your notice can pay the carrier and be done with it. Your recovery is then against the carrier, not the debtor.
How to deliver it with proof of receipt
Section 9-406(a) turns on the debtor receiving the notification, so proof of receipt is what you'll need if a payment is ever disputed.
Email it to the debtor's accounts payable address and ask for a written acknowledgment. Keep the reply.
For important debtors, also send it by a method with delivery confirmation, such as certified mail with a return receipt.
If the debtor takes NOAs through a portal or a payment network, submit it there and save the confirmation.
Call to confirm the debtor has updated its payee record to your remit-to address, and note who you spoke with and when.
When two NOAs collide
Sometimes a debtor receives NOAs from two factors for the same carrier. That can mean the carrier moved to a new factor without a release, or that the same invoices were factored twice. Many debtors hold payment until the factors sort it out, and either factor can be asked for proof of its assignment. Between the two factors, priority generally follows who filed or perfected first (UCC §9-322), which is why a UCC search before you fund matters. See conflicting NOAs for the full playbook.
Releases
A letter of release is a factor's written statement that it no longer claims some or all of a carrier's accounts, and who the debtor should pay instead. A careful debtor keeps paying the factor named in the last NOA it received until it sees one. When you take over a carrier from another factor, get the prior factor's release before you send your own NOA, and send the two together if you can.
A release that tells the debtor to pay the carrier is also a chance for fraud: whoever sends new bank details next gets the money. The release this tool builds asks the debtor to confirm the carrier's payment details using contact information already on file.
Keep copies
Keep the signed NOA, the delivery proof, the debtor's acknowledgment and any release in the carrier's file, with dates. If a debtor later pays the wrong party, those records are what you'll rely on.
Frequently asked questions
+Is a notice of assignment required for factoring?
The UCC doesn't make you send one, but until a debtor receives an authenticated notification, it can discharge its debt by paying the carrier (§9-406(a)). Without an NOA, a payment to the carrier counts, and your only recovery is against the carrier. Ask counsel how this applies to your agreements.
+Who signs a notice of assignment?
Section 9-406(a) requires the notification to be authenticated by the assignor (the carrier) or the assignee (the factor). Many factors have both sign. This template includes signature blocks for the factor and the carrier, plus an optional receipt acknowledgment for the debtor.
+Does an NOA cover future invoices?
Section 9-406(a) speaks of amounts "due or to become due", so a notice can cover future invoices if it reasonably identifies them. This template covers all amounts now due or to become due from the debtor to the carrier, and stays in effect until the factor sends a written release.
+What should a letter of release say?
Who is releasing, which carrier (with USDOT or MC), which accounts (all of them or specific invoices), the effective date, and who the debtor should pay instead: the carrier or a new factor. The releasing factor signs it.
+Can a broker ignore an NOA?
After receiving a valid notification, a debtor that pays the carrier instead of the factor hasn't discharged its debt under §9-406(a), so it can end up paying twice. A debtor can ask for reasonable proof of the assignment first, and may pay the carrier until the factor provides it (§9-406(c)). For a specific dispute, talk to counsel.
For factoring companies
Stop paying the wrong account.
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