The owner of an insurance company and an insurance agent entered into an agreement to use the agent’s number for the purpose of selling insurance policies and handling customers, while dividing the profits between them. After the owner waived his rights under the agreement, the insurance agent stopped transferring the distribution of profits arising from the policies sold.
The court ruled that the assignment of rights was made in violation of the provisions of the agreement and the law and is void. The rule is that an assignment of rights does not require the consent of the debtor, and this is based on the assumption that it does not matter to the debtor to whom he must perform his obligation, but in cases where the identity of the right holder must be taken into account and when the assignment may materially change the content of the right or cause the debtor’s situation to change to the worse or significantly burden him, it can be determined that a right is essentially non-assignable. Here, the original contract was a personal contract based on acquaintance and a relationship of trust between the parties, with the insurance agent relying on the aforementioned acquaintance, as he bears personal responsibility towards the insureds also for the actions of the opposing party. The agent never knew the party to whom the rights were assigned and its employees, and never agreed to work with them, or take responsibility for their actions with significant exposure for him. Thus, in light of the nature of the contract that attaches importance to the identity of the debtor and the burden and deterioration in the debtor’s situation that may occur due to the assignment, which was made without his express consent as required by the agreement, the assignment must be seen as essentially void and as constituting a material breach of the agreement.
