Andrew Durham was injured in a job-related accident that resulted in a workers' compensation settlement agreement with the employer's insurance carrier, Traveler's Indemnity Company. The settlement agreement required Traveler's to pay Durham $2500 per

Question

month for the rest of his life. To finance its obligation, Traveler's purchased an annuity in its name. The settlement agreement required Traveler's approval or written consent prior to an assignment of the annuity payments. Durham later decided to open a business and went to a credit union for a $214,000 loan. The credit union loaned the money, taking a security interest in Durham's monthly annuity payments. Traveler's consent was never secured. Discuss the conditions in which a right may not be assigned and assess if this was this a valid assignment.

Answer 1

Assignments can be made unless: (a) the assignment would substantially change the obligor's rights and duties; or (b) the assignment is forbidden by law or public policy; or (c) assignments are validly precluded by the contract itself. The original contract between Durham and Traveler's required Traveler's written consent to make a valid assignment. The assignment is therefore not valid.