assignment of policies right

Assignment Of Rights Agreement

Jump to section, what is an assignment of rights agreement.

​​An assignment of rights agreement is a written document in which one party, the assignor, assigns to another party all or part of their rights under an existing contract. The most common example of this would be when someone wants to sell their shares of stock in a company.

When you buy shares from someone else (the seller), they agree to transfer them over and give up any control they had on that share. This way, another party can take ownership without going through the trouble of trying to buy the whole company themselves.

Common Sections in Assignment Of Rights Agreements

Below is a list of common sections included in Assignment Of Rights Agreements. These sections are linked to the below sample agreement for you to explore.

Assignment Of Rights Agreement Sample

Reference : Security Exchange Commission - Edgar Database, EX-99.(H)(7) 5 dex99h7.htm FORM OF ASSIGNMENT AGREEMENT , Viewed December 20, 2021, View Source on SEC .

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Meet some of our Assignment Of Rights Agreement Lawyers

Orly Boger has worked in the high tech industry and in a leading law firm before launching her law firm. Orly focuses on startup companies and technology transactions. She structures and negotiates software and technology license agreements, strategic partnerships, cloud-based/SaaS agreements, internet related transactions, OEM agreements, supply, distribution, telecommunications. In addition, Orly has experience in serving as an in-house legal counsel for start up companies at various phases of their development, providing strategic legal advise to entrepreneurs and emerging companies with a comprehensive understanding of the business and legal issues. She has been helping companies develop a legal strategy for all aspects of their operations, from commercial transactions and partnerships, scalable SaaS or services agreements, privacy policies, employment related policies, open source licensing and much more.

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14.1: Assignment of Contract Rights

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LEARNING OBJECTIVES

• Understand what an assignment is and how it is made.
• Recognize the effect of the assignment.
• Know when assignments are not allowed.
• Understand the concept of assignor’s warranties.

The Concept of a Contract Assignment

Contracts create rights and duties. By an assignment , an obligee (one who has the right to receive a contract benefit) transfers a right to receive a contract benefit owed by the obligor (the one who has a duty to perform) to a third person ( assignee ); the obligee then becomes an assignor (one who makes an assignment).

The Restatement (Second) of Contracts defines an assignment of a right as “a manifestation of the assignor’s intention to transfer it by virtue of which the assignor’s right to performance by the obligor is extinguished in whole or in part and the assignee acquires the right to such performance.”Restatement (Second) of Contracts, Section 317(1). The one who makes the assignment is both an obligee and a transferor. The assignee acquires the right to receive the contractual obligations of the promisor, who is referred to as the obligor (see Figure 14.1 "Assignment of Rights" ). The assignor may assign any right unless (1) doing so would materially change the obligation of the obligor, materially burden him, increase his risk, or otherwise diminish the value to him of the original contract; (2) statute or public policy forbids the assignment; or (3) the contract itself precludes assignment. The common law of contracts and Articles 2 and 9 of the Uniform Commercial Code (UCC) govern assignments. Assignments are an important part of business financing, such as factoring. A factor is one who purchases the right to receive income from another.

Figure 14.1 Assignment of Rights

Method of Assignment

Manifesting assent.

To effect an assignment, the assignor must make known his intention to transfer the rights to the third person. The assignor’s intention must be that the assignment is effective without need of any further action or any further manifestation of intention to make the assignment. In other words, the assignor must intend and understand himself to be making the assignment then and there; he is not promising to make the assignment sometime in the future.

Under the UCC, any assignments of rights in excess of $5,000 must be in writing, but otherwise, assignments can be oral and consideration is not required: the assignor could assign the right to the assignee for nothing (not likely in commercial transactions, of course). Mrs. Franklin has the right to receive $750 a month from the sale of a house she formerly owned; she assigns the right to receive the money to her son Jason, as a gift. The assignment is good, though such a gratuitous assignment is usually revocable, which is not the case where consideration has been paid for an assignment.

Acceptance and Revocation

For the assignment to become effective, the assignee must manifest his acceptance under most circumstances. This is done automatically when, as is usually the case, the assignee has given consideration for the assignment (i.e., there is a contract between the assignor and the assignee in which the assignment is the assignor’s consideration), and then the assignment is not revocable without the assignee’s consent. Problems of acceptance normally arise only when the assignor intends the assignment as a gift. Then, for the assignment to be irrevocable, either the assignee must manifest his acceptance or the assignor must notify the assignee in writing of the assignment.

Notice to the obligor is not required, but an obligor who renders performance to the assignor without notice of the assignment (that performance of the contract is to be rendered now to the assignee) is discharged. Obviously, the assignor cannot then keep the consideration he has received; he owes it to the assignee. But if notice is given to the obligor and she performs to the assignor anyway, the assignee can recover from either the obligor or the assignee, so the obligor could have to perform twice, as in Exercise 2 at the chapter’s end, Aldana v. Colonial Palms Plaza . Of course, an obligor who receives notice of the assignment from the assignee will want to be sure the assignment has really occurred. After all, anybody could waltz up to the obligor and say, “I’m the assignee of your contract with the bank. From now on, pay me the $500 a month, not the bank.” The obligor is entitled to verification of the assignment.

Effect of Assignment

General rule.

An assignment of rights effectively makes the assignee stand in the shoes of the assignor. He gains all the rights against the obligor that the assignor had, but no more. An obligor who could avoid the assignor’s attempt to enforce the rights could avoid a similar attempt by the assignee. Likewise, under UCC Section 9-318(1), the assignee of an account is subject to all terms of the contract between the debtor and the creditor-assignor. Suppose Dealer sells a car to Buyer on a contract where Buyer is to pay $300 per month and the car is warranted for 50,000 miles. If the car goes on the fritz before then and Dealer won’t fix it, Buyer could fix it for, say, $250 and deduct that $250 from the amount owed Dealer on the next installment (called a setoff). Now, if Dealer assigns the contract to Assignee, Assignee stands in Dealer’s shoes, and Buyer could likewise deduct the $250 from payment to Assignee.

The “shoe rule” does not apply to two types of assignments. First, it is inapplicable to the sale of a negotiable instrument to a holder in due course. Second, the rule may be waived: under the UCC and at common law, the obligor may agree in the original contract not to raise defenses against the assignee that could have been raised against the assignor.Uniform Commercial Code, Section 9-206. While a waiver of defenses makes the assignment more marketable from the assignee’s point of view, it is a situation fraught with peril to an obligor, who may sign a contract without understanding the full import of the waiver. Under the waiver rule, for example, a farmer who buys a tractor on credit and discovers later that it does not work would still be required to pay a credit company that purchased the contract; his defense that the merchandise was shoddy would be unavailing (he would, as used to be said, be “having to pay on a dead horse”).

For that reason, there are various rules that limit both the holder in due course and the waiver rule. Certain defenses, the so-called real defenses (infancy, duress, and fraud in the execution, among others), may always be asserted. Also, the waiver clause in the contract must have been presented in good faith, and if the assignee has actual notice of a defense that the buyer or lessee could raise, then the waiver is ineffective. Moreover, in consumer transactions, the UCC’s rule is subject to state laws that protect consumers (people buying things used primarily for personal, family, or household purposes), and many states, by statute or court decision, have made waivers of defenses ineffective in such consumer transactions . Federal Trade Commission regulations also affect the ability of many sellers to pass on rights to assignees free of defenses that buyers could raise against them. Because of these various limitations on the holder in due course and on waivers, the “shoe rule” will not govern in consumer transactions and, if there are real defenses or the assignee does not act in good faith, in business transactions as well.

When Assignments Are Not Allowed

The general rule—as previously noted—is that most contract rights are assignable. But there are exceptions. Five of them are noted here.

Material Change in Duties of the Obligor

When an assignment has the effect of materially changing the duties that the obligor must perform, it is ineffective. Changing the party to whom the obligor must make a payment is not a material change of duty that will defeat an assignment, since that, of course, is the purpose behind most assignments. Nor will a minor change in the duties the obligor must perform defeat the assignment.

Several residents in the town of Centerville sign up on an annual basis with the Centerville Times to receive their morning paper. A customer who is moving out of town may assign his right to receive the paper to someone else within the delivery route. As long as the assignee pays for the paper, the assignment is effective; the only relationship the obligor has to the assignee is a routine delivery in exchange for payment. Obligors can consent in the original contract, however, to a subsequent assignment of duties. Here is a clause from the World Team Tennis League contract: “It is mutually agreed that the Club shall have the right to sell, assign, trade and transfer this contract to another Club in the League, and the Player agrees to accept and be bound by such sale, exchange, assignment or transfer and to faithfully perform and carry out his or her obligations under this contract as if it had been entered into by the Player and such other Club.” Consent is not necessary when the contract does not involve a personal relationship.

Assignment of Personal Rights

When it matters to the obligor who receives the benefit of his duty to perform under the contract, then the receipt of the benefit is a personal right that cannot be assigned. For example, a student seeking to earn pocket money during the school year signs up to do research work for a professor she admires and with whom she is friendly. The professor assigns the contract to one of his colleagues with whom the student does not get along. The assignment is ineffective because it matters to the student (the obligor) who the person of the assignee is. An insurance company provides auto insurance covering Mohammed Kareem, a sixty-five-year-old man who drives very carefully. Kareem cannot assign the contract to his seventeen-year-old grandson because it matters to the insurance company who the person of its insured is. Tenants usually cannot assign (sublet) their tenancies without the landlord’s permission because it matters to the landlord who the person of their tenant is. Section 14.4.1 "Nonassignable Rights" , Nassau Hotel Co. v. Barnett & Barse Corp. , is an example of the nonassignability of a personal right.

Assignment Forbidden by Statute or Public Policy

Various federal and state laws prohibit or regulate some contract assignment. The assignment of future wages is regulated by state and federal law to protect people from improvidently denying themselves future income because of immediate present financial difficulties. And even in the absence of statute, public policy might prohibit some assignments.

Contracts That Prohibit Assignment

Assignability of contract rights is useful, and prohibitions against it are not generally favored. Many contracts contain general language that prohibits assignment of rights or of “the contract.” Both the Restatement and UCC Section 2-210(3) declare that in the absence of any contrary circumstances, a provision in the agreement that prohibits assigning “the contract” bars “only the delegation to the assignee of the assignor’s performance.”Restatement (Second) of Contracts, Section 322. In other words, unless the contract specifically prohibits assignment of any of its terms, a party is free to assign anything except his or her own duties.

Even if a contractual provision explicitly prohibits it, a right to damages for breach of the whole contract is assignable under UCC Section 2-210(2) in contracts for goods. Likewise, UCC Section 9-318(4) invalidates any contract provision that prohibits assigning sums already due or to become due. Indeed, in some states, at common law, a clause specifically prohibiting assignment will fail. For example, the buyer and the seller agree to the sale of land and to a provision barring assignment of the rights under the contract. The buyer pays the full price, but the seller refuses to convey. The buyer then assigns to her friend the right to obtain title to the land from the seller. The latter’s objection that the contract precludes such an assignment will fall on deaf ears in some states; the assignment is effective, and the friend may sue for the title.

Future Contracts

The law distinguishes between assigning future rights under an existing contract and assigning rights that will arise from a future contract. Rights contingent on a future event can be assigned in exactly the same manner as existing rights, as long as the contingent rights are already incorporated in a contract. Ben has a long-standing deal with his neighbor, Mrs. Robinson, to keep the latter’s walk clear of snow at twenty dollars a snowfall. Ben is saving his money for a new printer, but when he is eighty dollars shy of the purchase price, he becomes impatient and cajoles a friend into loaning him the balance. In return, Ben assigns his friend the earnings from the next four snowfalls. The assignment is effective. However, a right that will arise from a future contract cannot be the subject of a present assignment.

Partial Assignments

An assignor may assign part of a contractual right, but only if the obligor can perform that part of his contractual obligation separately from the remainder of his obligation. Assignment of part of a payment due is always enforceable. However, if the obligor objects, neither the assignor nor the assignee may sue him unless both are party to the suit. Mrs. Robinson owes Ben one hundred dollars. Ben assigns fifty dollars of that sum to his friend. Mrs. Robinson is perplexed by this assignment and refuses to pay until the situation is explained to her satisfaction. The friend brings suit against Mrs. Robinson. The court cannot hear the case unless Ben is also a party to the suit. This ensures all parties to the dispute are present at once and avoids multiple lawsuits.

Successive Assignments

It may happen that an assignor assigns the same interest twice (see Figure 14.2 "Successive Assignments" ). With certain exceptions, the first assignee takes precedence over any subsequent assignee. One obvious exception is when the first assignment is ineffective or revocable. A subsequent assignment has the effect of revoking a prior assignment that is ineffective or revocable. Another exception: if in good faith the subsequent assignee gives consideration for the assignment and has no knowledge of the prior assignment, he takes precedence whenever he obtains payment from, performance from, or a judgment against the obligor, or whenever he receives some tangible evidence from the assignor that the right has been assigned (e.g., a bank deposit book or an insurance policy).

Some states follow the different English rule: the first assignee to give notice to the obligor has priority, regardless of the order in which the assignments were made. Furthermore, if the assignment falls within the filing requirements of UCC Article 9 (see Chapter 22 "Secured Transactions and Suretyship" ), the first assignee to file will prevail.

Figure 14.2 Successive Assignments

Assignor’s Warranties

An assignor has legal responsibilities in making assignments. He cannot blithely assign the same interests pell-mell and escape liability. Unless the contract explicitly states to the contrary, a person who assigns a right for value makes certain assignor’s warranties to the assignee: that he will not upset the assignment, that he has the right to make it, and that there are no defenses that will defeat it. However, the assignor does not guarantee payment; assignment does not by itself amount to a warranty that the obligor is solvent or will perform as agreed in the original contract. Mrs. Robinson owes Ben fifty dollars. Ben assigns this sum to his friend. Before the friend collects, Ben releases Mrs. Robinson from her obligation. The friend may sue Ben for the fifty dollars. Or again, if Ben represents to his friend that Mrs. Robinson owes him (Ben) fifty dollars and assigns his friend that amount, but in fact Mrs. Robinson does not owe Ben that much, then Ben has breached his assignor’s warranty. The assignor’s warranties may be express or implied.

KEY TAKEAWAY

Generally, it is OK for an obligee to assign the right to receive contractual performance from the obligor to a third party. The effect of the assignment is to make the assignee stand in the shoes of the assignor, taking all the latter’s rights and all the defenses against nonperformance that the obligor might raise against the assignor. But the obligor may agree in advance to waive defenses against the assignee, unless such waiver is prohibited by law.

There are some exceptions to the rule that contract rights are assignable. Some, such as personal rights, are not circumstances where the obligor’s duties would materially change, cases where assignability is forbidden by statute or public policy, or, with some limits, cases where the contract itself prohibits assignment. Partial assignments and successive assignments can happen, and rules govern the resolution of problems arising from them.

When the assignor makes the assignment, that person makes certain warranties, express or implied, to the assignee, basically to the effect that the assignment is good and the assignor knows of no reason why the assignee will not get performance from the obligor.

• If Able makes a valid assignment to Baker of his contract to receive monthly rental payments from Tenant, how is Baker’s right different from what Able’s was?
• Able made a valid assignment to Baker of his contract to receive monthly purchase payments from Carr, who bought an automobile from Able. The car had a 180-day warranty, but the car malfunctioned within that time. Able had quit the auto business entirely. May Carr withhold payments from Baker to offset the cost of needed repairs?
• Assume in the case in Exercise 2 that Baker knew Able was selling defective cars just before his (Able’s) withdrawal from the auto business. How, if at all, does that change Baker’s rights?
• Why are leases generally not assignable? Why are insurance contracts not assignable?

Assignment of insurance policies and claims | Practical Law

Assignment of insurance policies and claims

Practical law uk practice note w-031-6021  (approx. 19 pages).

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Insurance Policy Consent to Assignment Clauses

Many policyholders forget that their insurance policy is a contract and is subject, with exceptions, to the usual laws of contract. An issue that frequently arises is whether the named insured is able to assign insurance proceeds under the policy to another. The answer to that question is dependent on the type of coverage sought.

Most insurance policies have a “consent to assignment clause” that typically provides: “Assignment of interest under this policy shall not bind the Company until its consent is endorsed hereon.” 1 This clause is designed to protect the insurer from having to extend coverage to an entity it never agreed to cover. In California, the enforceability of the clause depends on both the timing of the assignment and whether the claim is a first party loss – where the insured is seeking benefits for a sunk ship or a burned building, or a third party claim, which protects insured in certain instances when the insured might be liable to another.

With respect to first party claims, insurers have a vested interest in their personal relationships with the named insureds, and before a loss , a legally recognized need to prevent non-consensual assignments to less responsible insureds. 2 After a first party loss , however, the insurer’s need to consent dissipates, because any assignment is only of money already due under the contract and any right of the insured as a result of the loss may be assigned with or without the consent of the insurer; thus the consent to assignment clause is deemed unenforceable. 3 With respect to third party claims, the California Supreme Court held in Henkel that the consent to assignment clause is enforceable and, as a result, a company that acquired a policyholder’s assets and liabilities could not receive the benefits of the policyholder’s liability coverage in the absence of an insurer-approved assignment regardless of when the assignment took place. 4

The enforceability of “consent-to-assignment” clauses is dependent on the law of each particular state. Always check with an attorney before making an assignment of policy benefits to another, regardless of the situation.

1    Henkel Corp. v. Hartford Accident & Indemnity Co. (2003) 29 Cal.4th 934 , 943. 2 Bergson v. Builders Ins. Co. (1869) 38 Cal. 541, 545. 3 Vierneisel v. Rhode Island Ins. Co. (1946) 77 Cal.App.2d 229 , 232 [house destroyed by fire before close of escrow; affirming assignment by sellers to buyers of right to recover proceeds under fire insurance policy]. 4 Henkel , supra , 29 Cal.4th at p. 944.

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California Supreme Court Overrules Existing Law on Assignment of Claims After Loss

On August 20, 2015, the California Supreme Court issued its unanimous opinion in Fluor Corp. v. Superior Court , Opinion No. S205889, an appeal from Fluor Corp. v. Superior Court (2012) 208 Cal.App.4th 1506, review granted and opinion superseded sub nom. Fluor Corp. v. S.C. (Cal. 2012) 149 Cal.Rptr.3d 675 (" Fluor ").  Petitioner Fluor Corporation asked the California Supreme Court to revisit its opinion in Henkel Corp. v. Hartford Accident and Indemnity Co. (2003) 29 Cal.4th 934 (" Henkel ").

Overruling Henkel , in an opinion written by Chief Justice Cantil-Sakauye, the Court unanimously sided with Fluor, holding that:

For the reasons set forth, Insurance Code section 520 applies to third party liability insurance. Under that provision, after personal injury (or property damage) resulting in loss occurs within the time limits of the policy, an insurer is precluded from refusing to honor an insured's assignment of the right to invoke defense or indemnification coverage regarding that loss. This result obtains even without consent by the insurer — and even though the dollar amount of the loss remains unknown or undetermined until established later by a judgment or approved settlement.

The Court remanded the case to the Court of Appeal for proceedings consistent with the Court's opinion.

The State of the Law Prior to Fluor .

This dispute arises out of the enforceability of anti-assignment clauses that are commonly included in insurance policies.  A typical anti-assignment clause reads:

Your rights and duties under this policy may not be transferred without our written consent except in the case of death of an individual named insured.

Henkel addressed the issue of whether the insured conveyed its liability insurance policies by operation of law when it sold certain assets to a successor corporation, where those assets included liabilities (i.e., a chemical products business).  Claimants sued the successor corporation for personal injuries allegedly caused by the predecessor corporation's chemical products business.  The predecessor corporation's liability insurers refused to defend the claim against the corporate successor, contesting the assignment of the insurance policies.  The successor corporation sued the liability insurers for refusing to defend. 

Henkel held that anti-assignment clauses in liability insurance policies are enforceable except if:

(1) at the time of the assignment the benefit has been reduced to a claim for money due or to become due, or

(2) at the time of the assignment the insurer has breached a duty to the insured, and the assignment is of a cause of action to recover damages for that breach.

( Henkel at 945.)  In other words, with regard to a liability policy, a court will enforce an anti-assignment clause unless the claim has already been reduced to a judgment or settlement, or the insurer has committed an assignable breach.

Fluor's facts are nearly identical to Henkel's . A successor corporation seeks coverage for asbestos claims under a predecessor corporation's liability policies. ( Fluor at 528.)  The policyholder, seeking to avoid an anti-assignment clause, argues that Henkel was wrongly decided.  The policyholder argues that Henkel ignored California Insurance Code section 520, enacted in 1872, which states "[a]n agreement not to transfer the claim of the insured against the insurer after a loss has happened, is void if made before the loss...."  In other words, Henkel appears to conflict with Insurance Code section 520. 

The Court of Appeal began its opinion by noting:

During the 130 years since its enactment, the 1872 statute has been cited only once. No one raised it in Henkel . This decision will be the second judicial opinion in the history of the state to even mention the statute, and the first to address it.  ( Id. )

After reviewing cases in both California and other states, the court of appeal concluded:

Here is the nub. The 1872 Legislature drew no bright lines and made no controlling pronouncements about liability insurance, or about how "loss" in the context of such policies is to be defined. We see nothing in Insurance Code section 520 or in Henkel to support Fluor–2's assumption that the Supreme Court would have reached a different result had the parties in that appeal briefed or argued the statute's applicability. In the absence of an express legislative directive, stare decisis controls.  ( Id . at 537.)

In sum, Henkel held that a policyholder can assign its rights, despite an anti-assignment clause, only after liability had been established (or a breach occurred).  Fluor Corporation argued, based on statute and on common law grounds, that a policyholder can assign its rights any time after a "loss" has occurred.  In the case of a liability policy, the "loss" is the event that triggers coverage under the policy (e.g., "bodily injury" or "property damage").

The California Court of Appeal in Flour sided with Hartford. The Court of Appeal concluded that section 520 does not apply to liability insurance. The appellate court further suggested that even assuming the statute applies to such policies, it should be construed to reflect the same rule articulated in Henkel .  On appeal to the California Supreme Court, Fluor argued against both propositions. 

The California Supreme Court's Opinion in Fluor .

In a unanimous decision written by the Chief Justice, the Supreme Court agreed with Fluor on both issues.  The Court, applying section 520, found that the statute applies to third party liability insurance, and that, properly construed in light of its relevant language and history, section 520 bars an insurer from refusing to honor an insured's assignment of policy coverage regarding injuries that predate the assignment.  The Court concluded that "It follows that the decision in Henkel, which assessed the proper application of a consent-to-assignment clause under common law principles, cannot stand in view of the contrary dictates of the controlling statutory provisions of section 520." (Slip Op. at 3.)

The Court concluded:

As further explained below, the rule embodied in section 520 is consistent with the overwhelming majority of cases decided before and since Henkel. The principle reflected in those cases — precluding an insurer, after a loss has occurred, from refusing to honor an insured's assignment of the right to invoke policy coverage for such a loss — has been described as a venerable one, borne of experience and practice, facilitating the productive transformation of corporate entities, and thereby fostering economic activity. ( Id .)

In short, after the Fluor decision the law in California is that courts will not enforce anti-assignment provisions in liability insurance policies after the loss has occurred.  With regard to standard occurrence-based liability policies, the "loss" is the coverage-triggering event, such as "property damage" or "bodily injury," and not the finding of liability.

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Post-Loss Assignments of Claims Under Insurance Policies

In the settlement of lawsuits involving insured claims, it is not uncommon that one condition of the settlement is that the defendant assign his or her claims under all applicable insurance policies to the party that filed suit.

Indeed, it is frequently the case that the defendant, particularly when the defendant is an individual, has a limited ability to pay a judgment and insurance coverage offers the best opportunity for a recovery by the suing party. Usually, such settlements are made without any serious thought being given to whether the defendant’s claim against its insurer is assignable; the assumption being that it is assignable.

However, insurance policies generally have anti-assignment clauses which prohibit the assignment of the policy, or an interest in the policy, without the insurer’s consent. These clauses come into play in determining the validity or enforceability of the assignment of a claim under an insurance policy and should be considered when such an assignment is part of a settlement.

When considering the enforceability of anti-assignment clauses in insurance policies, the courts generally draw a distinction between an assignment made prior to the occurrence of a covered loss (a “pre-loss” assignment) and an assignment made after the occurrence of a covered loss (a “post-loss” assignment).

In analyzing pre-loss assignments, the courts recognize that requiring an insurer to provide coverage to an assignee of its policy prior to the occurrence of a covered loss would place the insurer in the position of covering a party with whom it had not contracted nor been allowed to properly underwrite to assess the risks posed by that potential insured, and, accordingly, determine the appropriate premium to charge for the risks being undertaken or choose to decline coverage.

Post-loss assignments, on the other hand, take place after the insurer’s obligations under its policy have become fixed by the occurrence of a covered loss, thus the risk factors applicable to the assignee are irrelevant with regard to the covered loss in question. For these reasons, the majority of the courts enforce anti-assignment clauses to prohibit or restrict pre-loss assignments, but refuse to enforce anti-assignment clauses to prohibit or restrict post-loss assignments.

Katrina Cases

The Louisiana Supreme Court, which had not previously addressed the enforceability of anti-assignment clauses for post-loss assignments, was recently confronted with this issue in the In re: Katrina Canal Breaches Litigation, litigation involving consolidated cases arising out of Hurricane Katrina. The issue arose as a result of a lawsuit brought by the State of Louisiana as the assignee of claims under numerous insurance policies as part of the “Road Home” Program. The Road Home Program was set up following Hurricanes Katrina and Rita to distribute federal funds to homeowners suffering damage from the hurricanes. In return for receiving a grant of up to $150,000, homeowners were required to execute a Limited Subrogation/Assignment agreement, which provided in pertinent part:

Pursuant to these Limited Subrogation/Assignments, the State of Louisiana brought suit against more than 200 insurance companies to recover funds dispensed under the Road Home Program. The suit was removed to Federal Court under the Class Action Fairness Act and the insurers filed motions to dismiss, arguing that the assignments to the State of Louisiana were invalid under the anti-assignment clauses in the homeowner policies at issue.

On appeal, the United States Fifth Circuit Court of Appeals certified the following question to the Louisiana Supreme Court: “Does an anti-assignment clause in a homeowner’s insurance policy, which by its plain terms purports to bar any assignment of the policy or an interest therein without the insurer’s consent, bar an insured’s post-loss assignment of the insured’s claims under the policy when such an assignment transfers contractual obligations, not just the right to money due?”

In answering this question, the Louisiana Supreme Court began by noting that, as a general matter, contractual rights are assignable unless the law, the contract terms or the nature of the contract preclude assignment. Specific to the certified question, Louisiana Civil Code article 2653 provides that a right “cannot be assigned when the contract from which it arises prohibits the assignment of that right.” The Louisiana Supreme Court observed that the language of article 2653 is broad and, on its face, applies to all assignments, including post-loss assignments of insurance claims. The Court, therefore, construed the issue confronting it as whether Louisiana public policy would enforce an anti-assignment clause to preclude post-loss assignments of claims under insurance policies.

In addressing the public policy question, the Louisiana Supreme Court recognized the distinction between pre-loss assignments and post-loss assignments discussed by courts from other states and noted that the prevailing view was that anti-assignment clauses were invalid and/or unenforceable when applied to post-loss assignments. Notwithstanding this weight of authority, the Louisiana Supreme Court stated:

“[W]hile the Louisiana legislature has clearly indicated an intent to allow parties freedom to assign contractual rights, by enacting La. C.C. art. 2653, it has also clearly indicated an intent to allow parties freedom to contractually prohibit assignment of rights. We recognize the vast amount of national jurisprudence distinguishing between pre-loss and post-loss assignments and rejecting restrictions on post-loss assignments, however we find no public policy in Louisiana favoring assignability of claims over freedom of contract.”

Thus, Court refused to invalidate the enforceability of the anti-assignment clauses to the post-loss assignments before it based on public policy, adding that public policy determinations are better suited to the legislature.

Nonetheless, after having recognized the general enforceability of anti-assignment clauses to post-loss assignments, the Court immediately placed limits on when those clauses would be applicable, stating that to be applicable, they “must clearly and unambiguously express that the non-assignment clause applies to post-loss assignments.” The Court refused “to formulate a test consisting of specific terms or words,” which would satisfy this condition and remanded the case to the federal courts to determine whether the individual anti-assignment clauses in the various policies were sufficiently clear and explicit to be enforced with respect to post-loss assignments at issue.

A Broad Application

It should be noted that the Court’s opinion appears to apply broadly to all post-loss assignments irrespective of what specific rights are being assigned, despite the fact that the certified question was narrower and asked only about the applicability of a post-loss assignment where the assignment “transfers contractual obligations, not just the right to money due.”

In a footnote at the beginning of its opinion, the Louisiana Supreme Court observed that in certifying the question to it, the Fifth Circuit “disclaimed any intent” that the Court “confine its reply to the precise form or scope of the legal questions certified.” The footnote indicates that the Court’s opinion was not intended to be limited to only those post-loss assignments involving the assignment of contractual obligations.

Louisiana has departed from the majority view in holding that as a matter of general law, anti-assignment clauses are not inherently void with regard to post-loss assignments. However, it may be that in practical application, the results of individual cases may well be consistent with the majority rule of not enforcing anti-assignment clauses with regard to post-loss assignments because Louisiana courts may be reluctant to find that the anti-assignment clauses are sufficiently “clear and explicit” unless they specifically state that they apply to post-loss assignments, notwithstanding the Louisiana Supreme Court’s unwillingness to “formulate a test consisting of specific terms or words.”

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AOBs and Assignments of Insurance Rights

There are a multitude of hardships that Restoration Industry Association members face every day but one issue that is gaining more traction in the restoration industry is “assignment of benefits” (AOB). We talked in depth to attorney Ed Cross, RIA’s Restoration Advocate, and founding Chair of the Association’s Advocacy & Government Affairs (AGA) Committee, about the incredible opportunities AOBs present for the restoration industry — and to gather some tips when signing one.

What Is “Assignment of Benefits?” To put it plainly, assignment of benefits is a transfer of the legal title to a portion of an insurance claim over to a service provider. When someone has a loss on their property and they make a claim using their insurance policy, that claim can be transferred to another party. This allows contractors to control their own destinies and make legal claims directly against insurance companies who fail to pay the fair market value for restoration work, or insist on using standardized price lists as universal pricing. Xactware has repeatedly made clear that its pricing data is not intended to be used as global pricing and that contractors should set their own prices.

Many people do not have the money to restore their buildings after they’ve been damaged by a flood, fire, or other instances, but they need the restoration work done immediately.

“Contractors take an assignment of benefits in order to have security that their bill is going to get paid,” Cross said. “They do this in exchange for the assurance of immediate payment. So, there's an expectation that the insurance company is going to pay the bill.”

A Game of Cat and Mouse According to Cross, many times when the policyholder receives the insurance money, they aren’t interested in paying for anything. This puts the restoration contractor in a bind.

“Sometimes the policyholder will use it to pay off the mortgage on their house,” Cross said. “So now, not only do they have essentially a brand new house, it's also paid for, free and clear, at the expense of the restoration contractor who is not in a position to take back the work.”

Unlike a car being repossessed if you can’t make the payments on it, a restoration contractor isn’t in the position to take back their work. A contractor could file a lien, but that is a long, complex, and expensive process which could one day put a property into foreclosure, but that’s a rare outcome.

To increase the chance that the contractor’s name will appear on an insurance check, contractors in most states may obtain ownership of the portion of the insurance claim they were hired to address. This frequently allows the contractor to step into the shoes of the policyholder and collect directly from the insurance company. If the insurance company does not name the contractor on the check and the insured runs with the money, the contractor may be able to force the insurance company to pay again. Cross has done this many times against major insurance carriers.

Restoration contractors have the resources, the energy, and the wherewithal to pursue this collection and to press the insurance company to pay fair value,  whereas a typical policyholder doesn't have the resources, the expertise, or the desire to ensure that the contractor gets paid in full. This can leave the restoration contractors in a rough spot: those needing work will go with whatever the policy will pay, and if it pays too little, who should they go after?

“Many contractors agree to work for the amount of insurance proceeds,” Cross said. “And if the insurance company decides it wants to pay little or nothing, as they often want to do, the contractor gets left holding the bag. It places them in the predicament of trying to decide, do I sue my customer? Or do I try to go after this insurance company?”

Assignments got a bad rap because of an extraordinary law in the State of Florida that encouraged litigation by allowing the holder of an assignment to collect attorney’s fees in a lawsuit against an insurance company, even if there was no wrongdoing by the insurance company. The insurance lobby put an end to that when F.S. 627.7152 was passed. Among other things, it says that the holder of an assignment waives the right to collect money from an insured. It also greatly limited the scenarios when the holder of an assignment could collect attorney’s fees. This effectively eliminated assignments in State of Florida. Cross warns contractors against using assignments in the State of Florida, but points out that the issues there are present nowhere else in the country. Assignments should not be judged by unique circumstances in Florida that ended three years ago.

The States of Texas and Oregon generally refuse to enforce assignments of benefits, but they allow the assignment of a legal claim. Thus, if the insurance company breaches the insurance contract by underpaying on a claim, for example, or commits insurance bad faith, the contractor may be able to take ownership of the legal claim and sue the insurance company directly. But in most other states, contractors can and should seek assignments.

When policyholders either run off with the insurance money or use it to pay something off, (such as their mortgage), with a well-executed AOB you can go back to the insurance company and demand that they pay a second time.

“Ultimately, they write a second check when they're unable to get the policyholder to pay out the money,” Cross said. “And we're often able to do that without filing a lawsuit.”

Unfortunately, the insurance industry does not train adjusters to know that assignments of benefits need to be honored. Adjusters are often dismissive of them and give all the money to the policyholder — which is when things get out of control.

The AGA is out to change all of that. It will be releasing a 50-state Summary of the Law of Assignments regarding the enforceability of assignment of benefits which contractors can use in their communications and negotiations with stubborn insurance companies. At the RIA Convention in Orlando on June 29, 2021, Cross will present the first session of the AGA Academy, which will teach contractors how to prepare, present, and prosecute assignments using RIA’s Summary of the Law of Assignments. The event is rapidly selling out and contractors should sign up now to avoid missing this special opportunity.

Tips for Contractors and AOB’s Cross offers three points that every restoration contractor should take into account when looking to sign an AOB.

The first is that most restorers mistakenly believe that they have an AOB, when in fact, all they have is a direction to pay.

“The typical restoration work authorization says that the policyholder instructs the insurance company to name the contractor on the check and correctly to name the contractor on the check,” Cross said. “Contractors think that's an assignment. It's not an assignment; it is merely a direction to pay.”

An assignment is a transfer of legal title, meaning that ownership of part of the insurance claim is being transferred to the contractor. This puts the contractor in “privity” (a legal relationship) with the insurer that allows the contractor to obtain remedies based on the insurance policy. A direction to pay should be included in an assignment of benefits document. But it is not, in and of itself, an assignment because it does not transfer ownership.

Second is that an assignment should include more than the assignment of “benefits.” It should also include an assignment of the right to go to appraisal. Appraisal is a process under the insurance policy where if a policyholder and an insurance company are unable to agree on the amount of loss, they can submit the matter to independent appraiser, who sets the amount of the loss.

Last, and most important, the assignment should also include an assignment of the right to sue the insurance company for breach of the policy and for insurance bad faith in jurisdictions that recognize this. This is why Cross no longer generates “Assignments of benefits” for his clients; he generates “Assignments of Insurance Rights .” A well-drafted Assignment of Insurance rights includes assignments of benefits, the right to appraisal, and the rights to sue, as well as a direction to pay.

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Assignment of Rights Example: Everything You Need to Know

A good assignment of rights example is if a party was entitled to collect $100 for painting, they can transfer the right to receive payment to another party. 3 min read updated on February 01, 2023

Updated October 28, 2020:

A good assignment of rights example is if a party was entitled to collect $100 for painting, they can transfer the right to receive payment to another party. An assignment contract takes place when one party to an existing contract (the assignor) transfers the contract's obligations and benefits to another party (the assignee). 

What Is an Assignment Agreement?

A contract assignment occurs when a party assigns its contractual rights to a third party. The benefit the issuing party would have received from the contract is now assigned to the third party. The party appointing their rights is referred to as the assignor, while the party obtaining the rights is the assignee. Essentially, the assignor prefers that the assignee reverses roles and assumes the contractual rights and obligations as stated in the contract.

Before this can occur, all parties to the original contract must be notified. The party creating the assignment usually does so with the motive of profit. Generally, assignments are perfectly legal. In specific situations, they may be illegal when they have been prohibited by a clause in the contract or prohibited by law.

Use of an Assignment Agreement

In situations where you don't have the staff to perform a task, it may be necessary to outsource the work to another party. Assignment agreements are created to formally transfer the contractual responsibilities and rights to a third party, while also making sure to preserve your own obligations and legal rights. The use of an assignment agreement is appropriate when you're:

• Handing over your contractual responsibilities to a third party
• Taking over contracts or responsibilities held by another party

A contract assignment may also be referred to as an assignment agreement. An assignment agreement should include the:

• Name of the party transferring their contractual duties
• Name of the party receiving the contractual obligations and rights
• Third-party, or obligor, to the original contract
• Name of the actual contract, along with the expiration date
• If and when the obligor's approval has been received
• Specific date the contract will take effect
• State laws that govern the contract

Parties Involved in a Contract Assignment

Generally, a contract assignment is made up of the following parties:

• Obligor: The party that is committed to transferring benefits or rights to the party specified in the contract. The obligor is most likely the party that initially makes the contract.
• Assignor: The party that is the initial beneficiary of the benefits or rights. They are responsible for making the assignment. In other words, they will be handing over the rights they were initially going to receive.
• Assignee:  The party that will be accepting the benefits and rights from the assignor. A transfer may have multiple assignees.

The steps in an assignment are:

• The obligor creates a contract with the assignor.
• The rights are transferred from the assignor to the assignee.
• The assignee is paid the benefits from the obligor.

How Is a Contract Assignment Created?

In most cases, it is not necessary to notify the obligor of an assignment. The assignor needs to definitively establish their intent in assigning rights to the assignee. Generally speaking, assignment contracts can be both written and oral. However, it is recommended that the contract is written. 

It is important that the contract is written in the present tense. If any past or future tense is used, it will make the contract legally nonbinding.

How Assignments Work

The specific language used in the contract will determine how the assignment plays out. For example , one contract may prohibit an assignment, while another contract may require that all parties involved agree to it before proceeding. Remember, an assignment of a contract does not necessarily alleviate an assignor from all liability. Many contracts include an assurance clause guaranteeing performance. In other words, the initial parties to the contract guarantee the assignee will achieve the desired goal.

When Assignments Will Not Be Enforced

The following situations indicate when an  assignment of a contract is not enforced:

• The contract specifically prohibits the assignment.
• The assignment drastically changes the expected outcome.
• The assignment is against public policy or illegal.
• The contract contains a no-assignment clause.
• The assignment is for a future right that would only be attainable in a contract in the future.
• The contract hasn't been finalized or written yet.

If you need help with an assignment of rights, you can  post your job  on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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Taking robust security over warranty and indemnity insurance policies

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This article addresses the legal and practical issues for lenders on leveraged buy-outs in relation to taking security over warranty and indemnity insurance policies.

This article first appeared in the March issue of Butterworths Journal of International Banking and Financial Law.

• The M&A Landscape: rise of warranty and indemnity insurance
• Understanding the policy
• Warranty and indemnity (W&I) insurance policies are now frequently taken out by buyers on European leveraged buy-outs and can be a key element of the security package for the lenders.
• Review of the W&I policy is a key aspect of a lender’s diligence on the transaction to avoid pitfalls in the granting of security over the benefit of that policy.
• In most cases an assignment of the policyholder’s right to be paid proceeds under the W&I policy will be the most suitable form of security.

The M&A Landscape: rise of warranty and indemnity insurance

In recent years there has been a steady increase in the use of buy-side warranty and indemnity (W&I) insurance policies in the European mergers and acquisitions (M&A) markets as limited recourse acquisition structures prevail and the premium rates and terms on offer have become increasingly flexible and competitive. A W&I policy can provide the buyer with reliable financial protection, in many cases giving the potential for a more straightforward and expedient route to financial recompense than the alternative of a claim against the seller under the sale and purchase agreement (SPA) or against management warrantors who may remain within the business.

Many sellers will favour a clean exit from the SPA so that the sale proceeds can be distributed without the potential for claims, avoiding the need for sale proceeds to be held subject to escrow arrangements. This is particularly important for private equity sellers who may be prevented from taking on SPA liabilities under the terms of their fund documentation or need to make immediate distributions to their investors. W&I policies with no recourse against the seller (and a consequential increase in the policy premium) may therefore be preferred in many circumstances.

In principle, the existence of a well-constructed W&I policy should be an attractive prospect from the perspective of lenders financing an acquisition and a key element of their security package. It is no exaggeration to say that if a target business becomes distressed after acquisition, a claim under the W&I policy may be the only remaining asset that provides a route to a recovery.

It is critical for lenders to ensure that the security taken over these rights is appropriate and that the considerations for enforcing that security is well understood.

The first step to a lender obtaining a robust security position in relation to the W&I policy is to review the terms and coverage of the policy itself alongside the review of the SPA, as the rights of the lender under the security can never be better than those afforded to the buyer under the policy itself and (subject to any enhancements contained in the policy) the insured warranties/indemnities in the SPA. The areas of the policy that will be of particular relevance to the lender will include the following:

• Coverage and exclusions : At its core, the policy should provide an agreed level of coverage in respect of the representations and warranties made by the seller under the SPA, subject to exclusions and, potentially, enhancements. The policy will typically contain a schedule in which the cover position on each warranty/indemnity is set out.  Warranties will either be marked as insured or not insured, or insured subject to certain deemed amendments set out in the policy schedule.  The exclusions will include general matters (for instance known risks, forward looking statements and buyer fraud) and specific matters that the insurer will not be prepared to cover (for instance, relating to secondary tax liabilities or pension scheme funding shortfalls, or deal specific areas which the insurer has determined have not undergone sufficient due diligence). It is often also possible to obtain top-up cover (in excess of the W&I policy) for matters that are likely to exceed its limit of liability (for example, in respect of fundamental warranties concerning legal and beneficial title to the shares), and such risks may be insured under a separate (title) policy. A buyer may also require enhancements (for an additional premium) that provide coverage beyond the warranties from the sellers under the SPA, for instance a synthetic tax covenant.
• Check for any restrictions on assignment of the policy : Whilst W&I policies do typically allow for assignment of the proceeds of claims under them to entities providing financing to the buyer, it is essential to check that this is the case if such an assignment is to be taken (as discussed below). It should also be ensured that the security agreement complies with any specific policy requirements to achieve an assignment, such as using a required form of notice to the insurer. The policy should prohibit any other assignments and transfers of the buyer's rights under that policy.
• Onerous terms: Any entitlement to amounts claimed under the policy will always be subject to compliance with the policy terms imposed on the insured buyer.  When assessing the security value of an assignment, it is worth checking that there are no onerous conditions to cover (such as onerous claims reporting provisions or third party settlements restrictions allowing the insurer to avoid liability if not followed).
• Premium : Typically the premium paid will be a single lump sum paid at completion or shortly thereafter. The lender will need certainty that the premium has been paid since most policies will not be on risk if the premium is not paid. This may be a condition of the SPA, or if the policy requires payment after completion, may need to be addressed as a condition subsequent to the facilities agreement.
• De minimis and policy retention : Policies will typically contain two liability limitation provisions.  First, the policy will often specify a “ de minimis ”, which is the amount that each loss must reach before it engages cover under the policy (and is often set at the materiality threshold used for due diligence).  Once reached, the policy may “drop down” to cover the whole loss (and not just the excess over the de minimis ).  Other policies may only cover the excess.  In addition,  the policy will often specify that the buyer should bear the first aggregate proportion of claims arising under the policy by way of an aggregate retention. Similarly, the limit of liability under W&I policies is typically set at a value of between 10% and 30% of the transaction value (except in certain asset heavy transactions, where top up title cover may be obtained).  Lenders therefore need to assess whether or not the amount of insurance taken, and the retention/ de minimis provisions are adequate when assessing the value which the  security assignment will provide.
• Excess policies : It is not uncommon for additional limits of liability in excess of the primary W&I policy’s limits to be purchased from other insurers, who would each provide their cover by issuing excess policies. If so, it should be ensured that any security extends to these excess policies too and notifications are given direct to those insurers (and that the terms of those policies are truly aligned with the primary policy so there is no risk of mismatch of claims outcome between policy layers).

Lenders may also look to include a specific undertaking in the facilities agreement requiring the policyholder to comply with any on-going requirements under the W&I policy.

Assignment by way of security

Lenders would normally want to take an assignment by way of security over the buyer's contractual rights under the policy, being a mortgage over those intangible rights. In terms of the documentation, where the buyer is an English company, this will typically be included within the English law 'all asset' debenture granted by the buyer at exchange at the same time as the SPA and facilities agreement are signed.

Unless the transaction is structured such that there is very limited or no recourse against the seller, the lenders to the buyer are likely to require an assignment of the buyer’s rights under the SPA in addition to the security over the rights under the W&I policy.

Limiting the assignment to the proceeds of claims

It is important to ensure that such an assignment is in respect of the policyholder's rights to the proceeds of a claim, and does not purport to extend to an assignment of the policy itself. A transfer of the entire policy may more accurately be described as a novation of the insurance contract, where the assignee will become the insured party and assume the obligations of the policyholder. There is sufficient usage of the term "assignment" with this wider meaning, however, to lead to uncertainty if the drafting does not expressly limit the assignment to the rights to the proceeds of claims made by the policyholder under the policy. 1

An assignment of the entire policy is to be avoided, first as the lender will not expect to become liable for the obligations under the policy, and secondly as a purported transfer of the policy itself could lead to the insurer denying claims. This denial would be on the basis that the assignee as the new policyholder does not hold any insurable interest – it was not the entity to which the warranties were given – and/or that its insurable interest was not the interest covered by the policy. This would be on the basis that the assignee’s interest is related to the risk of non-payment of its loan, but that this was not the interest covered by the policy (which is the risk of loss through acquisition of a business which was not as valuable as it was warranted to be).

Provided there is no relevant restriction on assignment under the terms of the policy, an assignment by way of security can transfer the policyholder's right to the proceeds of a claim to the lenders (subject to the equity of redemption, allowing the policyholder to have the rights to the proceeds transferred back to it once the secured obligations have been discharged). The policyholder will continue to be responsible for bringing and litigating any claim under the policy.

This structure would not entitle the lender to control the conduct of the making of a claim under the policy. This means that if the policyholder is not co-operative, the making of a claim through it may need to be achieved in another way in any enforcement scenario, such as by procuring a change of the board of directors after having enforced share security over the shares in the policyholder or by exercising voting rights contained in that share security or by the exercise of a security power of attorney.

In practice, however, it would be difficult for a lender to be in a position to make a claim under the policy without cooperation from the policyholder, management of the target business and/or the private equity sponsor. A disputed claim under a W&I policy will likely be complex and will require the support of the key persons with detailed knowledge of the target business and/or that were involved with the acquisition. The purpose of the security interest should therefore better be considered as a means of ensuring that the proceeds from such claim are controlled and applied in repayment of the debt in priority to other creditors.

Transforming the equitable assignment into a statutory assignment

If no notice of the security interest is given to the insurer, the assignment of the buyer's rights to the secured party will be an equitable assignment. This can be transformed into a 'legal' or 'statutory' assignment pursuant to s.136(1) Law of Property Act 1925 by giving written notice of the assignment to the insurer, provided that the conditions in that section are complied with.

S.136(1) Law of Property Act 1925 applies to the assignment of a debt or other legal thing in action where the following conditions are satisfied:

• There is an "absolute assignment", that is, an assignment that is not conditional. An outright assignment of a debt with a proviso for reassignment on repayment by the assignor of the money lent (as will be the case in the security package) is regarded as absolute. Care must be taken with the drafting however, as an assignment that is stated to operate only until repayment of the money lent is regarded as conditional, and therefore incapable of being transformed into a legal assignment;2
• The assignment is "by writing under the hand of the assignor". The recent High Court judgment in the case of Frischmann v Vaxeal Holdings SA [2023] EWHC 2698 has caused consternation among finance practitioners in ruling that, owing to this requirement, an assignment executed by an attorney of the assignor is not capable of becoming a statutory assignment. So long as this legal uncertainty remains a cautious approach will likely be taken with respect to the use of powers of attorney in the execution of assignments by assignors.
• Express notice in writing must be given to the debtor. In the case of an assignment of proceeds from a W&I policy, as previously noted this will be a notice from the secured party to the insurer in a form typically scheduled to the security document and/or the policy.

Transforming the assignment to a statutory assignment is advantageous as it would allow the assignee (the secured party) to commence proceedings for non-payment of the proceeds of a claim  against the insurer without the need for joining the assignor (the policyholder) to those proceedings, which would be the case if there were only an equitable assignment. In the context of leveraged buy-outs, the request for a notice to the insurer may be resisted or requested to be moved to a perfection step taken at the time of an event of default or declared default, in line with the general trend in negotiation of security documentation on transactions with strong sponsors to move all but the most essential aspects of security perfection to matters to be taken only in a distressed scenario. Given the key importance of a W&I policy to the acquisition structure and likely corresponding limited (or lack of) recourse against the sellers, in most cases there should be no proportional reason for the lender to forego the notification to the insurer as a condition to closing (which, as noted, may in any event be a requirement under the terms of the policy). Most insurers providing W&I insurance will be accustomed to engaging with and accommodating the financing parties, and there are unlikely to be any commercial sensitivities which may occasionally exist in delivering such notices to the sellers in the case of an assignment of rights under the SPA.

Other protections

Other forms of direct contractual protection for lenders may be seen but are generally less advantageous or are more cumbersome:

• The lender may theoretically be added to the policy as co-insured, although this does not tend to be seen in the market because its insurable interest is different from the borrower’s (as explained earlier) and therefore would be resisted by W&I insurers. This would also increase the cost of the insurance, but any failure to comply with policy terms by the buyer under the insurance policy would then not result in the lender (or security agent on behalf of the secured parties) losing the benefit of co-insurance. This would be an additional protection, and not a replacement to the security assignment over the buyer's rights under the policy.
• The buyer may instruct the insurer to note the lender (or security agent on behalf of the secured parties) as sole loss payee, requiring the insurer to pay out to the lender first, or having the lender's interest noted on the policy. However, without a security assignment or some direct contractual agreement with the insurer, there would be nothing to prevent the buyer from subsequently reversing its instructions.

It is clear that a watertight security interest over the W&I policy could be vital in a severe downside scenario where policyholder and/or target business have become distressed and the acquisition warranties and/or indemnities in the SPA have been breached giving rise to recourse under that policy. This can sometimes be overlooked as an area of focus in the heat of negotiation and there are plenty of traps for the unwary.

Authored by Jamie Rogers and Oliver Shafe.

1 For a discussion on these two usages of “assignment” in the context of insurance policies see Dr Chee Ho Tham, ‘Assignment (or novation) of indemnity policies?’, (2023) 11 JIBFL 748. https://plus.lexis.com/api/permalink/4fe11612-7f83-4ba9-a80d-857c28331eaf/?context=1001073

2 tancred v delagoa bay and east africa railway (1889) 23 qbd 239; durham bros v robertson [1898] 1 qb 765; good v revenue and customs commissioners [2023] ewca civ 114..

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Assignment in Insurance Policy | Meaning | Explanation | Types

Table of Contents

• 1 What is Assignment in an Insurance Policy?
• 2 Who can make an assignment?
• 3 What happens to the ownership of the policy upon Assignment?
• 4 Can assignment be changed or cancelled?
• 5 What happens if the assignment dies?
• 6 What is the procedure to make an assignment?
• 7 Is it necessary to Inform the insurer about assignment?
• 8 Can a policy be assigned to a minor person?
• 9 Who pays premium when a policy is assigned?
• 10.1 1. Conditional Assignment
• 10.2 2. Absolute Assignment

What is Assignment in an Insurance Policy?

Assignment means a complete transfer of the ownership of the policy to some other person. Usually assignment is done for the purpose of raising a loan from a bank or a financial institution .

Assignment is governed by Section 38 of the Insurance Act 1938 in India. Assignment can also be done in favour of a close relative when the policyholder wishes to give a gift to that relative. Such an assignment is done for “natural love and affection”. An example, a policyholder may assign his policy to his sister who is handicapped.

Who can make an assignment?

A policyholder who has policy on his own life can assign the policy to another person. However, a person to whom a policy has been assigned can reassign the policy to the policyholder or assign it to any other person. A nominee cannot make an assignment of the policy. Similarly, an assignee cannot make a nomination on the policy which is assigned to him.

What happens to the ownership of the policy upon Assignment?

When a policyholder assign a policy, he loses all control on the policy. It is no longer his property. It is now the assignee’s property whether the policyholder is alive or dead, the assignee alone will get the policy money from the insurance company.

If the assignee dies, then his (assignee’s) legal heirs will be entitled to the policy money.

Can assignment be changed or cancelled?

An assignment cannot be changed or cancelled. The assignee can of course, reassign the policy to the policyholder who assigned it to him. He can also assign the policy to any other person because it is now his property. We can think of a bank reassigning the policy to the policyholder when their loan is repaid.

What happens if the assignment dies?

If the assignee dies, the assignment does not get cancelled. The legal heirs of the assignee become entitled to the policy money. Assignment is a legal transfer of all the interests the policyholder has in the policy to the assignee.

What is the procedure to make an assignment?

Assignment can be made only after issue of the policy bond. The policyholder can either write out the wording on the policy bond (endorsement) or write it on a separate paper and get it stamped. (Stamp value is the same, as the stamp required for the policy — Twenty paise per one thousand sum assured). When assignment is made by an endorsement on the policy bond, there is no need for stamp because the policy is already stamped.

Is it necessary to Inform the insurer about assignment?

Yes, it is necessary to give information about assignment to the insurance company. The insurer will register the assignment in its records and from then on recognize the assignee as the owner of the policy. If someone has made more than one assignment, then the date of the notice will decide which assignment has priority. In the case of reassignment also, notice is necessary.

Can a policy be assigned to a minor person?

Assignment can be made in favour of a minor person. But it would be advisable to appoint a guardian to receive the policy money if it becomes due during the minority of the assignee.

Who pays premium when a policy is assigned?

When a policy is assigned normally, the assignee should pay the premium, because the policy is now his property. In practice, however, premium is paid by the assignor (policyholder) himself. When a bank gives a loan and takes the assignment of a policy a security, it will ask the assignor himself to pay the premium and keep it in force. In the case of an assignment as a gift, the assignor would like to pay the premium because he has gifted the policy.

Types of assignment

Assignment may take two forms:

• Conditional Assignment.
• Absolute Assignment.

1. Conditional Assignment

It would be useful where the policyholder desires the benefit of the policy to go to a near relative in the event of his earlier death. It is usually effected for consideration of natural love and affection. It generally provides for the right to revert the policyholder in the event of the assignee predeceasing the policyholder or the policyholder surviving to the date of maturity.

2. Absolute Assignment

This assignment is generally made for valuable consideration. It has the effect of passing the title in the policy absolutely to the assignee and the policyholder in no way retains any interest in the policy. The absolute assignee can deal with the policy in any manner he likes and may assign or transfer his interest to another person.

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2020 Georgia Code Title 33 - Insurance Chapter 24 - Insurance Generally Article 1 - General Provisions § 33-24-17. Assignment of Policies

A policy may be assignable or not assignable, as provided by its terms. Subject to its terms relating to assignability, any life or accident and sickness policy issued under the terms of which the beneficiary may be changed upon the sole request of the policy owner may be assigned either by pledge or by transfer of title by an assignment executed by the policy owner alone and delivered to the insurer, whether or not the pledgee or assignee is the insurer. Any assignment shall entitle the insurer to deal with the assignee as the owner or pledgee of the policy in accordance with the terms of the assignment until the insurer has received at its home office written notice of termination of the assignment or pledge or written notice by or on behalf of some other person claiming some interest in the policy in conflict with the assignment.

(Code 1933, § 56-2423, enacted by Ga. L. 1960, p. 289, § 1.)

Insurance Code does not prohibit assignment of conversion privilege under policy of group life insurance. 1969 Op. Att'y Gen. No. 69-2.

RESEARCH REFERENCES

Am. Jur. 2d.

- 44 Am. Jur. 2d, Insurance, § 774 et seq.

- 45 C.J.S., Insurance, § 730.

- Validity as against creditors of change of beneficiary of insurance policy from estate to individual, 6 A.L.R. 1173; 106 A.L.R. 596.

Insurance: assignment of life or benefit policy for valuable consideration as change of beneficiary, 38 A.L.R. 109.

Rights as between mortgagor and insurance company where policy avoided as to mortgagor, but not as to mortgagee, 52 A.L.R. 278.

Divorce of insured and beneficiary as affecting the latter's right in life insurance, 52 A.L.R. 386; 175 A.L.R. 1220.

Right of life insured to assign policy without beneficiary's consent, 60 A.L.R. 191.

Right of lessor or lessee or his privies to benefit of insurance taken out by other or his privies, 66 A.L.R. 864.

Rights and remedies of beneficiary after death of insured who had pledged policy to secure debt, 71 A.L.R. 1437, 111 A.L.R. 628; 160 A.L.R. 1389.

Assignment of policy insuring life of minor, 95 A.L.R. 205.

Assignment of claim for loss under fire insurance policy as affecting the furnishing of proofs of loss, 101 A.L.R. 1300.

Avoidance on ground of fraud, mistake, duress, or mental incompetency of otherwise validly effected change of beneficiary of insurance policies, 105 A.L.R. 950.

Construction, application, and effect of provision of life insurance policy as to filing of assignment, or duplicate, with insurer, 111 A.L.R. 709.

Assignment by assured of policy of indemnity or liability insurance, or of rights thereunder, 122 A.L.R. 144.

Assignment of policy of life insurance as affecting subsequent attempt to change beneficiary, 125 A.L.R. 1097.

Rights, in respect of proceeds of policy of life insurance, as between beneficiary and one to whom policy has been assigned otherwise than as collateral, 138 A.L.R. 1357.

National Service Life Insurance Act, 153 A.L.R. 1413; 155 A.L.R. 1445; 156 A.L.R. 1445; 157 A.L.R. 1445; 158 A.L.R. 1445.

Duty of insurer to investigate mental competency of insured to assign policy, or to designate or change designation of beneficiary, or as to fraud or undue influence in that regard, 162 A.L.R. 547.

Change of beneficiary in old line insurance policy as affected by failure to comply with requirements as to manner of making change, 19 A.L.R.2d 5.

Validity of assignment of life insurance policy to one who has no insurable interest in insured, 30 A.L.R.2d 1310.

Transfer or pledge of fire insurance policy as collateral security for debt as within policy provisions prohibiting or restricting assignment of policy, 31 A.L.R.2d 1199.

Testamentary nature of life insurance trust, 53 A.L.R.2d 1112.

Right of one who pays medical or similar expenses of injured person under life care, or similar, contract to recover the cost thereof from tortfeasor, 78 A.L.R.2d 822.

Law governing assignment of life insurance policy or of rights thereunder, 97 A.L.R.2d 1399.

Obligation of insurer to give assignee of life policy notice of premiums due, 68 A.L.R.3d 360.

Coverage under all-risk insurance, 30 A.L.R.5th 170.

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Assignment under Insurance Policies

By J Mandakini, NUALS

Editor’s Note: This paper attempts to explore the concept of assignment under Indian law especially Contract Act, Insurance Act and Transfer of Property Act. It seeks to appreciate why the assignment is made use of for securities of a facility sanctioned by ICICI Bank. Also, it explains how ICICI Bank faces certain problems in executing the same. 

INTRODUCTION

For any facility sanctioned by a lender, collateral is always deposited to secure the same. Such mere deposition will not suffice, the borrower has to explicitly permit the lender to recover from the borrower, such securities in case of his default.

This is done by the concept of assignment, dealt with adequately in Indian law. Assignment of obligations is always a tricky matter and needs to be dealt with carefully. The Bank should not fall short of any legally permitted lengths to ensure the same. This is why ambiguity in its security documents have to be rectified. 

This paper attempts to explore the concept of assignment in contract law. It seeks to appreciate why the assignment is made use of for securities of a facility sanctioned by ICICI Bank. The next section will deal with how ICICI Bank faces certain problems in executing the same. The following sections will talk about possible risks involved, as well as defenses and solutions to the same.

WHAT IS ASSIGNMENT?

Assignment refers to the transfer of certain or all (depending on the agreement) rights to another party. The party which transfers its rights is called an assignor, and the party to whom such rights are transferred is called an assignee. Assignment only takes place after the original contract has been made. As a general rule, assignment of rights and benefits under a contract may be done freely, but the assignment of liabilities and obligations may not be done without the consent of the original contracting party.

The liability on a contract cannot be transferred so as to discharge the person or estate of the original contractor unless the creditor agrees to accept the liability of another person instead of the first. [i]

Illustration

P agrees to sell his car to Q for Rs. 100. P assigns the right to receive the Rs. 100 to S. This may be done without the consent of Q. This is because Q is receiving his car, and it does not particularly matter to him, to whom the Rs. 100 is being handed as long as he is being absolved of his liability under the contract. However, notice may still be required to be given. Without such notice, Q would pay P, in spite of the fact that such right has been assigned to S. S would be a sufferer in such case.

In this case, that condition is being fulfilled since P has assigned his right to S. However, P may not assign S to be the seller. P cannot just transfer his duties under the contract to another. This is because Q has no guarantee as to the condition of S’s car. P entered into the contract with Q on the basis of the merits of P’s car, or any other personal qualifications of P. Such assignment may be done with the consent of all three parties – P, Q, S, and by doing this, P is absolved of his liabilities under the contract.

 1.1. Effect of Assignment

Immediately on the execution of an assignment of an insurance policy, the assignor forgoes all his rights, title and interest in the policy to the assignee. The premium or loan interest notices etc. in such cases will be sent to the assignee. [ii] However, the existence of obligations must not be assumed, when it comes to the assignment. It must be accompanied by evidence of the same. The party asserting such a personal obligation must prove the existence of an express assumption by clear and unequivocal proof. [iii]

 Assignment of a contract to a third party destroys the privity of contract between the initial contracting parties. New privity is created between the assignee and the original contracting party. In the illustration mentioned above, the original contracting parties were P and Q. After the assignment, the new contracting parties are Q and S.

 1.2. Revocation of Assignment

Assignment, once validly executed, can neither be revoked nor canceled at the option of the assignor. To do so, the insurance policy will have to be reassigned to the original assignor (the insured).

 1.3. Exceptions to Assignment

There are some instances where the contract cannot be assigned to another.

• Express provisions in the contract as to its non-assignability – Some contracts may include a specific clause prohibiting assignment. If that is so, then such a contract cannot be assigned. Assignability is the rule and the contrary is an exception. [iv]

Pensions, PFs, military benefits etc. Illustration

 1.4. enforcing a contract of assignment.

From the day on which notice is given to the insurer, the assignee becomes the beneficiary of the policy even though the assignment is not registered immediately. It does not wait until the giving of notice of the transfer to the insurer. [vi] However, no claims may lie against the insurer until and unless notice of such assignment is delivered to the insurer.

If notice of assignment is not provided to the obligor, he is discharged if he pays to the assignor. Assignee would have to recover from the assignor. However, if the obligor pays the assignor in spite of the notice provided to him, he would still be liable to the assignee.

The following two illustrations make the point amply clear:

Illustrations

1. Seller A assigns its right to payment from buyer X to bank B. Neither A nor B gives notice to X. When payment is due, X pays A. This payment is fully valid and X is discharged. It will be up to B to recover it from A

2. Seller A assigns to bank B its right to payment from buyer X. B immediately gives notice of the assignment to X. When payment is due, X still pays A. X is not discharged and B is entitled to oblige X to pay a second time.

An assignee doesn’t stand in better shoes than those of his assignor. Thus, if there is any breach of contract by the obligor to the assignee, the latter can recover from the former only the same amount as restricted by counter claims, set offs or liens of the assignor to the obligor.

The acknowledgment of notice of assignment is conclusive proof of, and evidence enough to entertain a suit against an assignor and the insurer respectively who haven’t honoured the contract of assignment.

1.5. Assignment under various laws in India

There is no separate law in India which deals with the concept of assignment. Instead, several laws have codified it under different laws. Some of them have been discussed as follows:

1.5.1. Under the Indian Contract Act

There is no express provision for the assignment of contracts under the Indian Contract Act. Section 37 of the Act provides for the duty of parties of a contract to honour such contract (unless the need for the same has been done away with). This is how the Act attempts to introduce the concept of assignment into Indian commercial law. It lays down a general responsibility on the “representatives” of any parties to a contract that may have expired before the completion of the contract. (Illustrations to Section 37 in the Act).

An exception to this may be found from the contract, e.g. contracts of a personal nature. Representatives of a deceased party to a contract cannot claim privity to that contract while refusing to honour such contract. Under this Section, “representatives” would also include within its ambit, transferees and assignees. [vii]

Section 41 of the Indian Contract Act applies to cases where a contract is performed by a third party and not the original parties to the contract. It applies to cases of assignment. [viii] A promisee accepting performance of the promise from a third person cannot afterwards enforce it against the promisor. [ix] He cannot attain double satisfaction of its claim, i.e., from the promisor as well as the third party which performed the contract. An essential condition for the invocation of this Section is that there must be actual performance of the contract and not of a substituted promise.

  1.5.2. Under the Insurance Act

The creation of assignment of life insurance policies is provided for, under Section 38 of the Insurance Act, 1938.

• When the insurer receives the endorsement or notice, the fact of assignment shall be recorded with all details (date of receipt of notice – also used to prioritise simultaneous claims, the name of assignee etc). Upon request, and for a fee of an amount not exceeding Re. 1, the insurer shall grant a written acknowledgment of the receipt of such assignment, thereby conclusively proving the fact of his receipt of the notice or endorsement. Now, the insurer shall recognize only the assignee as the legally valid party entitled to the insurance policy.

 1.5.3. Under the Transfer of Property Act

Indian law as to assignment of life policies before the Insurance Act, 1938 was governed by Sections 130, 131, 132 and 135 of the Transfer of Property Act 1882 under Chapter VIII of the Act – Of Transfers of Actionable Claims. Section 130 of the Transfer of Property Act states that nothing contained in that Section is to affect Section 38 of the Insurance Act.

 I) Section 130 of the Transfer of Property Act

An actionable claim may be transferred only by fulfilling the following steps:

• Signed by a transferor (or his authorized agent)

The transfer will be complete and effectual as soon as such an instrument is executed. No particular form or language has been prescribed for the transfer. It does not depend on giving notice to the debtor.

The proviso in the section protects a debtor (or other person), who, without knowledge of the transfer pays his creditor instead of the assignee. As long as such payment was without knowledge of the transfer, such payment will be a valid discharge against the transferee. When the transfer of any actionable claim is validly complete, all rights and remedies of transferor would vest now in the transferee. Existence of an instrument in writing is a sine qua non of a valid transfer of an actionable claim. [x]

 II) Section 131 of the Transfer Of Property Act

This Section requires the notice of transfer of actionable claim, as sent to the debtor, to be signed by the transferor (or by his authorized agent), and if he refuses to sign it, a signature by the transferee (or by his authorized agent). Such notice must state both the name and address of the transferee. This Section is intended to protect the transferee, to receive from the debtor. The transfer does not bind a debtor unless the transferor (or transferee, if transferor refuses) sends him an express notice, in accordance with the provisions of this Section.

III) Section 132 of the Transfer Of Property Act

This Section addresses the issue as to who should undertake the obligations under the transfer, i.e., who will discharge the liabilities of the transferor when the transfer has been made complete – would it be the transferor himself or the transferee, to whom the rest of the surviving contract, so to speak, has been transferred.

This Section stipulates, that the transferee himself would fulfill such obligations. However, where an actionable claim is transferred with the stipulation in the contract that transferor himself should discharge the liability, then such a provision in the contract will supersede Ss 130 and 132 of this Act. Where the insured hypothecates his life insurance policies and stipulates that he himself would pay the premiums, the transferee is not bound to pay the premiums. [xi]

FACILITIES SECURED BY INSURANCE POLICIES – HOW ASSIGNMENT COMES INTO THE PICTURE

Many banks require the borrower to take out or deposit an insurance policy as security when they request a personal loan or a business loan from that institution. The policy is used as a way of securing the loan, ensuring that the bank will have the facility repaid in the event of either the borrower’s death or his deviations from the terms of the facility agreement.

Along with the deposit of the insurance policy, the policyholder will also have to assign the benefits of the policy to the financial institution from which he proposes to avail a facility. The mere deposit, without writing, or passing of any document of title to such a claim, does not create any equitable charge. [xii]

ETHICS OF ASSIGNING LIFE INSURANCE POLICY TO LENDERS

The purpose of taking out a life insurance policy on oneself, is that in the event of an untimely death, near and dear ones of the deceased are not left high and dry, and that they would have something to fall back on during such traumatic times. Depositing and assigning the rights under such policy document to another, would mean that there is a high chance that benefits of life insurance would vest in such other, in the event of unfortunate death and the family members are prioritized only second. These are not desirable circumstances where the family would be forced to cope with the death of their loved one coupled with the financial crisis.

 Thus, there is a need to examine the ethics of:

• The bank accepting such assignment

The customer should be cautious before assigning his rights under life insurance policies. By “cautious”, it is only meant that he and his dependents and/or legal heirs should be aware of the repercussions of the act of assigning his life insurance policy. It is conceded that no law prohibits the assignment of life insurance policies.

In fact, Section 38 of the Insurance Act, 1938 , provides for such assignments. Judicial cases have held life insurance policies as property more than a social welfare measure. [xiii] Further, the bank has no personal relationship with any customer and thus has no moral obligation to not accept such assignments of life insurance.

However, the writer is of the opinion that, in dealing with the assignment of life insurance policies, utmost care and caution must be taken by the insured when assigning his life insurance policy to anyone else.

CURRENT STAND OF ICICI REGARDING FACILITIES SECURED BY INSURANCE POLICY, WITH SPECIFIC REFERENCE TO ASSIGNMENT OF OBLIGATIONS

This Section seeks to address and highlight the manner in which ICICI Bank drafts its security documents with regard to the assignment of obligations. The texts placed in quotes in the subsequent paragraphs are verbatim extracts from the security document as mentioned.

Composite Document for Corporate and Realty Funding

 “ 8 .   CHARGING CLAUSE

  The Mortgagor doth hereby:

iii) Assign and transfer unto the Mortgagee all the Bank Accounts and all rights, title, interest, benefits, claims and demands whatsoever of the Mortgagor in, to, under and in respect of the Bank Accounts and all monies including all cash flows and receivables and all proceeds arising from Projects and Other Projects_______________, insurance proceeds, which have been deposited / credited / lying in the Bank Accounts, all records, investments, assets, instruments and securities which represent all amounts in the Bank Accounts, both present and future (the “Account Assets”, which expression shall, as the context may permit or require, mean any or each of such Account Assets) to have and hold the same unto and to the use of the Mortgagee absolutely and subject to the powers and provisions herein contained and subject also to the proviso for redemption hereinafter mentioned;

(v) Assign and transfer unto the Mortgagee all right, title, interest, benefit, claims and demands whatsoever of the Mortgagors, in, to, under and/or in respect of the Project Documents (including insurance policies) including, without limitation, the right to compel performance thereunder, and to substitute, or to be substituted for, the Mortgagor thereunder, and to commence and conduct either in the name of the Mortgagor or in their own names or otherwise any proceedings against any persons in respect of any breach of, the Project Documents and, including without limitation, rights and benefits to all amounts owing to, or received by, the Mortgagor and all claims thereunder and all other claims of the Mortgagor under or in any proceedings against all or any such persons and together with the right to further assign any of the Project Documents, both present and future, to have and to hold all and singular the aforesaid assets, rights, properties, etc. unto and to the use of the Mortgagee absolutely and subject to the powers and provisions contained herein and subject also to the proviso for redemption hereinafter mentioned.”

 ICICI Bank’s Standard Terms and Conditions Governing Consumer Durable Loans

  “ insurance.

The Borrower further agrees that upon any monies becoming due under the policy, the same shall be paid by the Insurance Company to ICICI Bank without any reference / notice to the Borrower, but not exceeding the principal amount outstanding under the Insurance Policy. The Borrower specifically acknowledges that in all cases of claim, the Insurance Company will be solely liable for settlement of the claim, and he/she will not hold ICICI Bank responsible in any manner whether for compensation, recovery of compensation, processing of claims or for any reason whatsoever.

Reference has been made only to assignment of assets, rights, benefits, interests, properties etc. No specific reference has been made to the assignment of obligations of the assignor under such insurance contract.

THE ISSUE FACED BY ICICI BANK

Where ICICI Bank accepts insurance policy documents of customers as security for a loan, in the light of the fact that the documents are silent about the question of assignment of obligations, are they assigned to ICICI Bank? Where there is hypothecation of a life insurance policy, with a stipulation that the mortgagor (assignor) should pay the premiums, and that the mortgagee (assignee) is not bound to pay the same, Sections 130 and 132 do not apply to such cases. [xiv] With rectification of this issue, ICICI Bank can concretize its hold over the securities with no reservations about its legality.

RISKS INVOLVED

This section of the paper attempts to explore the many risks that ICICI Bank is exposed to, or other factors which worsen the situation, due to the omission of a clause detailing the assignment of obligations by ICICI Bank.

Practices of Other Companies

The practices of other companies could be a risk factor for ICICI Bank in the light of the fact that some of them expressly exclude assignment of obligations in their security documents.

There are some companies whose notice of assignment forms contain an exclusive clause dealing with the assignment of obligations. It states that while rights and benefits accruing out of the insurance policy are to be assigned to the bank, obligations which arise out of such policy documents will not be liable to be performed by the bank. Thus, they explicitly provide for the only assignment of rights and benefits and never the assignment of obligations.

Possible Obligation to Insurance Companies

By not clearing up this issue, ICICI Bank could be held to be obligated to the insurance company from whom the assignor took the policy, for example, with respect to insurance premiums which were required to be paid by the assignor. This is not a desirable scenario for ICICI Bank. In case of default by the assignor in the terms of the contract, the right of ICICI Bank over the security deposited (insurance policy in question) could be fraught in the legal dispute.

Possible litigation

Numerous suits may be instituted against ICICI Bank alleging a violation of the Indian Contract Act. Some examples include allegations of concealment of fact, fraud etc. These could be enough to render the existing contract of assignment voidable or even void.

Contra Proferentem

This doctrine applies in a situation when a provision in the contract can be interpreted in more than one way, thereby creating ambiguities. It attempts to provide a solution to interpreting vague terms by laying down, that a party which drafts and imposes an ambiguous term should not benefit from that ambiguity. Where there is any doubt or ambiguity in the words of an exclusion clause, the words are construed more forcibly against the party putting forth the document, and in favour of the other party. [xv]

The doctrine of contra proferentem attempts to protect the layman from the legally knowledgeable companies which draft standard forms of contracts, in which the former stands on a much weaker footing with regard to bargaining power with the latter. This doctrine has been used in interpreting insurance contracts in India. [xvi]

If litigation ensues as a result of this uncertainty, there are high chances that the Courts will tend to favour the assignor and not the drafter of the documents.

POSSIBLE DEFENSES AGAINST DISPUTES FOR THE SECURITY DOCUMENTS AS THEY ARE NOW

This section of the paper attempts to give defences which the Bank may raise in case of any disputes arising out of silence on the matter of assignability of obligations.

Interpretation of the Security Documents

UNIDROIT principles expressly provide a method for interpretation of contracts. [xvii] The method consists of utilizing the following factors:

This defence relates to the concept of estoppel embodied in Section 115 of the Indian Evidence Act, 1872. According to the Section, when one person has, by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative shall be allowed, in any suit or proceeding between himself and such person or his representatives, to deny the truth of that thing.

If a man either by words or by conduct has intimated that he consents to an act which has been done and that he will not offer any opposition to it, and he thereby induces others to do that which they otherwise might have abstained from, he cannot question legality of the act he had sanctioned to the prejudice of those who have so given faith to his words or to the fair inference to be drawn from his conduct. [xviii] Subsequent conduct may be relevant to show that the contract exists, or to show variation in the terms of the contract, or waiver, or estoppel. [xix]

Where the meaning of the instrument is ambiguous, a statement subsequently interpreting such instrument is admissible. [xx] In the present case, where the borrower has never raised any claims with regard to non assignability of obligations on him, and has consented to the present conditions and relations with ICICI Bank, he cannot he cannot be allowed to raise any claims with respect to the same.

Internationally, the doctrine of post contractual conduct is invoked for such disputes. It refers to the acts of parties to a contract after the commencement of the contract. It stipulates that where a party has behaved in a particular manner, so as to induce the other party to discharge its obligations, even if there has been a variation from the terms of the contract, the first party cannot cite such variation as a reason for its breach of the contract.

Where the parties to a contract are both under a common mistake as to the meaning or effect of it, and therefore embark on a course of dealing on the footing of that mistake, thereby replacing the original terms of the contract by a conventional basis on which they both conduct their affairs, then the original contract is replaced by the conventional basis. The parties are bound by the conventional basis. Either party can sue or be sued upon it just as if it had been expressly agreed between them. [xxi]

The importance of consensus ad idem has been concretized by various case laws in India. Further, if the stipulations and terms are uncertain and the parties are not ad idem there can be no specific performance, for there was no contract at all. [xxii]

In the present case, the minds of the assignor and assignee can be said to have not met while entering into the assignment. The assignee never had any intention of undertaking any obligations of the assignor. In Hartog v Colin & Shields, [xxiii] the defendants made an offer to the plaintiffs to sell hare skins, offering to a pay a price per pound instead of per piece.

AVOIDING THESE RISKS

To concretize ICICI Bank’s stand on the assignment of obligations in the matter of loans secured by insurance policies, the relevant security documents could be amended to include such a clause.

For instances where loans are secured by life insurance policies, a standard set by the American Banker’s Association (ABA) has been followed by many Indian commercial institutions as well. [xxvi] The ABA is a trade association in the USA representing banks ranging from the smallest community bank to the largest bank holding companies. ABA’s principal activities include lobbying, professional development for member institutions, maintenance of best practices and industry standards, consumer education, and distribution of products and services. [xxvii]

There are several ICICI security documents which have included clauses denying any assignment of obligations to it. An extract of the deed of hypothecation for vehicle loan has been reproduced below:

“ 3. In further pursuance of the Loan Terms and for the consideration aforesaid, the Hypothecator hereby further agrees, confirms, declares and undertakes with the Bank as follows:

(i)(a) The Hypothecator shall at its expenses keep the Assets in good and marketable condition and, if stipulated by the Bank under the Loan Terms, insure such of the Assets which are of insurable nature, in the joint names of the Hypothecator and the Bank against any loss or damage by theft, fire, lightning, earthquake, explosion, riot, strike, civil commotion, storm, tempest, flood, erection risk, war risk and such other risks as may be determined by the Bank and including wherever applicable, all marine, transit and other hazards incidental to the acquisition, transportation and delivery of the relevant Assets to the place of use or installation. The Hypothecator shall deliver to the Bank the relevant policies of insurance and maintain such insurance throughout the continuance of the security of these presents and deliver to the Bank the renewal receipts / endorsements / renewed policies therefore and till such insurance policies / renewal policies / endorsements are delivered to the Bank, the same shall be held by the Hypothecator in trust for the Bank. The Hypothecator shall duly and punctually pay all premia and shall not do or suffer to be done or omit to do or be done any act, which may invalidate or avoid such insurance. In default, the Bank may (but shall not be bound to) keep in good condition and render marketable the relevant Assets and take out / renew such insurance. Any premium paid by the Bank and any costs, charges and expenses incurred by the Bank shall forthwith on receipt of a notice of demand from the Bank be reimbursed by the Hypothecator and/or Borrower to the Bank together with interest thereon at the rate for further interest as specified under the Loan Terms, from the date of payment till reimbursement thereof and until such reimbursement, the same shall be a charge on the Assets…”

The inclusion of such a clause in all security documents of the Bank can avoid the problem of assignability of obligations in insurance policies used as security for any facility sanctioned by it.

An assignment of securities is of utmost importance to any lender to secure the facility, without which the lender will not be entitled to any interest in the securities so deposited.

In this paper, one has seen the need for assignment of securities of a facility. Risks involved in not having a separate clause dealing with non assignability of obligations have been discussed. Certain defences which ICICI Bank may raise in case of the dispute have also been enumerated along with solutions to the same.

Formatted by March 2nd, 2019.

BIBLIOGRAPHY

[i] J.H. Tod v. Lakhmidas , 16 Bom 441, 449

[ii] http://www.licindia.in/policy_conditions.htm#12, last visited 30 th June, 2014

[iii] Headwaters Construction Co. Ltd. v National City Mortgage Co. Ltd., 720 F. Supp. 2d 1182 (D. Idaho 2010)

[iv] Indian Contract Act and Specific Relief Act, Mulla, Vol. I, 13 th Edn., Reprint 2010, p 968

[v] Khardah Co. Ltd. v. Raymond & Co ., AIR 1962 SC 1810: (1963) 3 SCR 183

[vi] Principles of Insurance Law, M.N. Srinivasan, 8 th Edn., 2006, p. 857

[vii] Ram Baran v Ram Mohit , AIR 1967 SC 744: (1967) 1 SCR 293

[viii] Sri Sarada Mills Ltd. v Union of India, AIR 1973 SC 281

[ix] Lala Kapurchand Godha v Mir Nawah Himayatali Khan, [1963] 2 SCR 168

[x] Velayudhan v Pillaiyar, 9 Mad LT 102 (Mad)

[xi] Hindustan Ideal Insurance Co. Ltd. v Satteya, AIR 1961 AP 183

[xii] Mulraj Khatau v Vishwanath, 40 IA 24 – Respondent based his claim on a mere deposit of the policy and not under a written transfer and claimed that a charge had thus been created on the policy.

[xiii] Insure Policy Plus Services (India) Pvt. Ltd. v The Life Insurance Corporation of India, 2007(109)BOMLR559

[xiv] Transfer of Property Act, Sanjiva Row, 7 th Edn., 2011, Vol II, Universal Law Publishing Company, New Delhi

[xv] Ghaziabad Development Authority v Union of India, AIR 2000 SC 2003

[xvi] United India Insurance Co. Ltd. v M/s. Pushpalaya Printers, [2004] 3 SCR 631, General Assurance Society Ltd. v Chandumull Jain & Anr., [1966 (3) SCR 500]

[xvii] UNIDROIT Principles, Art 4.3

[xviii] B.L.Sreedhar & Ors. v K.M. Munireddy & Ors., 2002 (9) SCALE 183

[xix] James Miller & Partners Ltd. v Whitworth Street Estates (Manchester) Ltd., [1970] 1 All ER 796 (HL)

[xx] Godhra Electricity Co. Ltd. v State of Gujarat, AIR 1975 SC 32

[xxi] Amalgamated Investment & Property Co. Ltd. v Texas Commerce International Bank Ltd., [1981] 1 All ER 923

[xxii] Smt. Mayawanti v Smt. Kaushalya Devi, 1990 SCR (2) 350

[xxiii] [1939] 3 All ER 566

[xxiv] Terrell v Alexandria Auto Co., 12 La.App. 625

[xxv] http://www.uncitral.org/pdf/english/CISG25/Pamboukis.pdf, last visited on 30 th June, 2014

[xxvi] https://www.phoenixwm.phl.com/shared/eforms/getdoc.jsp?DocId=525.pdf, last visited on 30 th June, 2014

[xxvii] http://www.aba.com/About/Pages/default.aspx, last visited on 30 th June, 2014

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Middle East Crisis C.I.A. Director Is Heading to Cairo for New Truce Talks

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• A destroyed house in Rafah in southern Gaza. Reuters
• Mourning relatives killed during strikes in Rafah. Fatima Shbair/Associated Press
• Blocking a road in Tel Aviv to call for the return of hostages taken during the Oct. 7 attack led by Hamas. Jack Guez/Agence France-Presse — Getty Images
• A camp for displaced people in Rafah. Mohammed Abed/Agence France-Presse — Getty Images
• A house destroyed in a strike in Deir al Balah, in central Gaza. Mohammed Saber/EPA, via Shutterstock
• Aid dropped into northern Gaza. Leo Correa/Associated Press
• Palestinians searching for survivors under the rubble of a house after an Israeli airstrike in Rafah. Haitham Imad/EPA, via Shutterstock
• Israeli soldiers near the Israel-Gaza border. Hannah Mckay/Reuters
• A poster on Wednesday in Tehran of Gen. Mohammad Reza Zahedi, who was killed in an Israeli strike in Damascus, Syria. Arash Khamooshi for The New York Times

The C.I.A. director is heading to Cairo for new hostage talks.

The C.I.A. director, William J. Burns, is expected to travel to Cairo on Saturday for further talks on releasing Israeli hostages being held in Gaza, according to two people briefed on the plans.

American officials believe negotiating a pause in fighting between Israel and Hamas and the exchange of Israeli hostages held in Gaza for Palestinian prisoners held in Israel is the only way to put a temporary cease-fire into effect and increase the flow of humanitarian aid into the enclave.

Mr. Burns, a key figure in the continuing negotiations, is expected to be joined by David Barnea, the head of Mossad, Israel’s spy agency, and negotiators from Egypt and Qatar. Neither the Americans nor the Israelis speak directly to Hamas. Instead, their proposals are relayed through Egyptian and Qatari officials, who speak to members of Hamas.

Mr. Burns’s travel plans were earlier reported by The Wall Street Journal on Thursday.

The cease-fire talks have been stuck for weeks. This round will be taking place after President Biden spoke to Prime Minister Benjamin Netanyahu of Israel by phone on Thursday, repeating his call for a negotiated deal that would result in an “immediate cease-fire” and the release of hostages taken by Hamas.

Negotiators have at times seen the possibility of breakthroughs, only to have setbacks. A push for a deal before the start of the Muslim holy month of Ramadan last month also was unsuccessful .

The current sticking point appears to be the return of Palestinians to northern Gaza, a main Hamas demand that Israel has been reluctant to give in to, according to people briefed on the talks.

Mr. Burns, a seasoned diplomat and negotiator before he became the C.I.A. leader, has put various proposals on the table, prodding parties to endorse plans to take to Hamas. It is not clear if Mr. Burns will be taking a new deal to the meetings.

Negotiations have been slow in part because it can take two days or more to relay proposals from negotiating sessions to Yahya Sinwar, the Hamas leader in Gaza and the presumed mastermind of the Oct. 7 attack on Israel. Mr. Sinwar has been approving all Hamas counterproposals on hostage negotiations. He is believed to be hiding in the tunnels under Gaza, protected from Israeli raids by a group of hostages he is using as human shields.

— Julian E. Barnes reporting From Washington

Israel to open another crossing for aid after pressure from Biden.

Israel has agreed to open another crossing and increase the flow of aid getting into Gaza, a move seemingly aimed at tempering the U.S. president’s growing frustration over the dire humanitarian crisis in the enclave.

The Israeli government confirmed the new measures in an overnight statement, after the Biden administration announced them late Thursday after a tense phone call between President Biden and Prime Minister Benjamin Netanyahu. During the call, Mr. Biden threatened to condition future support for Israel on how it addresses his concerns about civilian casualties and the humanitarian situation in Gaza.

In a statement, a spokeswoman for the National Security Council said that Israel had agreed to open the Erez crossing to allow aid into northern Gaza, to use the port of Ashdod to direct aid into the enclave and to significantly increase deliveries from Jordan — “at the president’s request.”

“These steps,” the spokeswoman, Adrienne Watson, said, “must now be fully and rapidly implemented.”

The Israeli government did not say when it would open Erez crossing, a checkpoint between Israel and northern Gaza that Hamas attacked on Oct. 7 and that Israel had refused to re-open since. It said only that Israel would allow the “temporary delivery” of aid through the Erez crossing and the port of Ashdod, which sits about 16 miles north of Gaza on Israel’s Mediterranean coast.

Israel has come under rising pressure from U.S. officials and humanitarian agencies to open more border crossings for aid amid warnings from the United Nations that famine looms after nearly six months of war.

Mr. Biden has grown increasingly critical of Israel’s approach to the war against Hamas in Gaza, saying that more must be done to protect civilians. The killing of seven aid workers this week by Israeli forces appeared to bring that to a head, with Mr. Biden saying he was “outraged” and that Israel has “not done enough to protect civilians.”

That frustration carried over into his call with Mr. Netanyahu on Thursday, when Mr. Biden tried for the first time to leverage American aid to influence the conduct of the war against Hamas — prompting Israel to commit to letting more food and supplies into Gaza.

“As the president said today on the call, U.S. policy with respect to Gaza will be determined by our assessment of Israel’s immediate action on these and other steps, including steps to protect innocent civilians and the safety of aid workers,” Ms. Watson said in the statement.

The most dire shortages are in northern Gaza, where desperation has prompted people to swarm trucks carrying assistance and where aid groups say they have struggled to deliver supplies because of Israeli restrictions and widespread lawlessness.

Nearly all of the aid allowed into Gaza since the war began has entered through two main crossing points: Kerem Shalom and Rafah, which are both in the southern part of the enclave. But getting truck convoys from the southern border crossings to the north is difficult and dangerous, and the route is sometimes blocked by roads damaged by Israeli bombardment, Israeli checkpoints or battles between Hamas fighters and Israeli troops.

Defense Secretary Lloyd J. Austin III, in a call with his Israeli counterpart on Wednesday, also “raised the need for the rapid increase of aid coming through all crossings in the coming days,” according to the Pentagon.

Late last month, the International Court of Justice in The Hague ordered Israel to ensure the “provision of unhindered aid” into Gaza, using some of its strongest language yet. Israel has rejected accusations that it is responsible for delays in the delivery of aid.

Patrick Kingsley contributed reporting.

— Cassandra Vinograd and Erica L. Green

Biden tells Netanyahu that U.S. support hinges on treatment of Gaza civilians.

President Biden threatened on Thursday to condition future support for Israel on how it addresses his concerns about civilian casualties and the humanitarian crisis in Gaza, prompting Israel to commit to permitting more food and other supplies into the besieged enclave in hopes of placating him.

During a tense 30-minute call with Prime Minister Benjamin Netanyahu of Israel, Mr. Biden for the first time leveraged U.S. aid to influence the conduct of the war against Hamas that has inflamed many Americans and others around the world. The announcement of additional aid routes hours later met some but not all of Mr. Biden’s demands.

“President Biden emphasized that the strikes on humanitarian workers and the overall humanitarian situation are unacceptable,” according to a White House summary of the call. “He made clear the need for Israel to announce and implement a series of specific, concrete, and measurable steps to address civilian harm, humanitarian suffering, and the safety of aid workers. He made clear that U.S. policy with respect to Gaza will be determined by our assessment of Israel’s immediate action on these steps.”

The statement was the sharpest the White House has issued on Israel’s conduct in the six months of its war against Hamas, underscoring the president’s growing frustration with Mr. Netanyahu and his anger over this week’s killing of seven aid workers by Israeli military forces. But while the president repeated his call for a negotiated deal that would result in an “immediate cease-fire” and the release of hostages taken by Hamas, White House officials stopped short of saying directly that he might limit U.S. arms supplies if not satisfied.

By the middle of the night in Jerusalem, Israel made its first gestures to Mr. Biden. In a statement, the government said it would increase aid deliveries to Gaza, including through the port of Ashdod and the Erez crossing, a checkpoint between Israel and northern Gaza that Hamas attacked on Oct. 7 and Israel had kept closed ever since. The statement did not say when the crossing would be reopened.

Biden administration officials, who spoke on the condition of anonymity to describe the private call in more detail, said that Mr. Netanyahu agreed to additional commitments intended to assuage the president. Among others, the officials said, Israel would promise to institute more measures to reduce civilian casualties and to empower negotiators brokering a temporary cease-fire deal in exchange for the release of hostages.

The reported agreement came as American officials held out the prospect of consequences if Mr. Netanyahu resisted. Secretary of State Antony J. Blinken, who dialed into the call between the president and prime minister, said afterward that Israel needed to do more to increase the flow of humanitarian supplies to Gaza, a challenge that has expanded exponentially since the attack on aid workers prompted some groups to reconsider their activities on the ground .

“If we lose that reverence for human life, we risk becoming indistinguishable from those we confront,” Mr. Blinken said during a stop at NATO headquarters in Brussels. “Here’s the current reality in Gaza despite important steps that Israel has taken to allow assistance into Gaza: The results on the ground are woefully insufficient and unacceptable.”

The secretary of state made clear that the Biden administration was now ready to exact a price if Israel continued to rebuff its counsel. “If we don’t see the changes that we need to see, there’ll be changes in policy,” he said.

The president has long refused to curb the arms flow to influence Israel’s approach to the war. Mr. Biden said after Hamas killed 1,200 people and took hundreds of hostages in October that his support for Israel was “rock solid and unwavering.” While he has increasingly criticized what he sees as the excesses of the military operation, he has until now stuck by his vow.

But with rising agitation on the political left, particularly in electoral swing states like Michigan, even some of Mr. Biden’s closest Democratic allies are coming around to the view that Washington should exercise more control over the weaponry, including Senator Chris Coons, a fellow Democrat from Delaware and confidant of the president.

“I think we’re at that point,” Mr. Coons said on CNN on Thursday morning. If Mr. Netanyahu were to order the Israeli military into the southern Gaza city of Rafah in force and “drop thousand-pound bombs and send in a battalion to go after Hamas and make no provision for civilians or for humanitarian aid,” he added, then “I would vote to condition aid to Israel.”

Mr. Netanyahu did not immediately release a description of his call with Mr. Biden, but in other comments on Thursday he appeared unbowed. In a meeting in Jerusalem with visiting Republican lawmakers organized by the American Israel Public Affairs Committee, known as AIPAC, the prime minister pushed back strongly against Mr. Biden’s longstanding insistence on a two-state solution to the Palestinian conflict.

“There is a contrary move, an attempt to force, ram down our throats a Palestinian state, which will be another terror haven, another launching ground for an attempt, as was the Hamas state in Gaza,” Mr. Netanyahu said. “That is opposed by Israelis, overwhelmingly.”

In a separate video statement, he focused on the threat he sees from Iran. “For years, Iran has been acting against us, both directly and through its proxies, and therefore Israel is acting against Iran and its proxies, in both defensive and offensive operations,” Mr. Netanyahu said, referring to an Israeli airstrike that killed seven Iranian military officers in Syria this week.

“We will know how to defend ourselves,” he added, “and we will operate according to the simple principle by which those who attack us or plan to attack us — we will attack them.”

The White House statement noted that Mr. Biden stood by Israel against Iran during his Thursday call with Mr. Netanyahu, which in addition to Mr. Blinken included Vice President Kamala Harris and Jake Sullivan, the national security adviser.

“The two leaders also discussed public Iranian threats against Israel and the Israeli people,” the statement said. “President Biden made clear that the United States strongly supports Israel in the face of those threats.”

Unlike previous comments, however, the latest White House statement made no mention of Oct. 7 nor the by-now ritual defense of Israel’s right to respond to Hamas. Instead, it emphasized that “an immediate cease-fire is essential” and said that Mr. Biden “urged the prime minister to empower his negotiators to conclude a deal without delay to bring the hostages home.” A person briefed on the situation, who spoke on the condition of anonymity, said negotiators including William J. Burns, the C.I.A. director, will travel to Cairo on Saturday for further talks on such a deal.

At a briefing after the call between the leaders, John F. Kirby, a White House spokesman, said the president wants to see “concrete tangible steps” to reduce the violence against civilians and increase access for humanitarian aid to Gaza and predicted that Israel would make announcements of specific changes within hours or days.

But Mr. Kirby would not outline specific metrics for judging Israel’s response or what Mr. Biden would do if not satisfied. “What we want to see are some real changes on the Israeli side and, you know, if we don’t see changes from their side, there will have to be changes from our side,” he said.

Some Israel supporters criticized Mr. Biden for giving in to pressure from the left, arguing that it could prolong the war by emboldening Israel’s enemies. “Hamas, Iran, Hezbollah, and the rest of the destroy-Israel axis are sitting back and reveling in the growing tensions and signs of a coming breach between Washington and Jerusalem,” said John Hannah, a senior fellow at the Jewish Institute for National Security of America.

The pivot stemmed from the killing of the seven aid workers, who were deployed in Gaza by World Central Kitchen, the humanitarian group founded by the celebrity chef José Andrés. Mr. Biden called himself “ outraged and heartbroken ” over the incident and made a point of calling Mr. Andrés to express his condolences.

Inside World Central Kitchen’s Work in Gaza

World central kitchen has suspended its relief efforts in gaza after seven aid workers were killed in israeli airstrikes on monday. videos reveal the challenges of food distribution in a territory under siege..

Zomi Frankcom and Damian Soból arrived in Gaza on a mission to feed Palestinians, documenting their efforts in social media videos like these. Then on April 1, they were killed by Israeli airstrikes, along with five other colleagues, bringing the work of the World Central Kitchen in Gaza to a halt. The charity’s videos offer a rare window into the challenges of food distribution in Gaza, a territory on the brink of famine that’s been cut off from the outside world. Celebrity chef José Andrés started World Central Kitchen in 2010 in response to the earthquake in Haiti. The organization brings meals to areas impacted by natural disasters or conflict, including communities displaced inside Israel after the Oct. 7 attacks. Since October, the group said it delivered more than 43 million meals to Palestinians through community kitchens, truck convoys and airdrops. In mid-March, they were the first to deliver aid by sea with a ship carrying nearly 200 tons of food from Cyprus. The Israeli military released footage of the coordination behind that effort, which brought food to northern Gaza, where the U.N. says people are facing catastrophic levels of hunger. “I’m very hopeful that we can be bringing millions and millions of meals daily. We may fail, but the biggest failure will be not trying.” A second maritime delivery arrived just hours before the attack. In a video statement, the Israeli military called the attack a grave mistake. Since Oct. 7, nearly 200 aid workers have been killed in Gaza, according to the U.N. And for now, the World Central Kitchen has suspended its operations there.

The seven workers were killed by three successive strikes on three cars traveling along a road in Gaza. Israeli officials have called the episode a tragic mistake based on a misidentification of the vehicles, but have not explained more expansively how it happened. The cars were marked with World Central Kitchen logos, although the attack took place at night. Mr. Andrés has said his organization kept in touch with Israeli officials about movement plans.

As of Thursday morning, the Israelis had not yet communicated any initial findings of their promised investigation into the strikes to the United States, according to a senior Biden administration official who insisted on anonymity to detail internal conversations.

Mr. Biden’s shift on Thursday came as he absorbed withering criticism from Democrats. Among those speaking out have been former colleagues in the administration he served as vice president under President Barack Obama, who assailed him for voicing shock without taking action against Mr. Netanyahu, known by the nickname Bibi.

“The U.S. government is still supplying 2 thousand pound bombs and ammunition to support Israel’s policy,” Ben Rhodes, a former deputy national security adviser to Mr. Obama, wrote on social media on Wednesday. “Until there are substantive consequences, this outrage does nothing. Bibi obviously doesn’t care what the U.S. says, its about what the U.S. does.”

Jon Favreau, a former chief speechwriter for Mr. Obama, was even more derisive of Mr. Biden. “The president doesn’t get credit for being ‘privately enraged’ when he still refuses to use leverage to stop the IDF from killing and starving innocent people,” he wrote, referring to the Israel Defense Forces. “These stories only make him look weak.”

Some Palestinian advocates reacted with aggravation to Mr. Biden’s articulation of anger over the deaths of the aid workers because in their view he has not responded with nearly enough indignation over the killing of more than 32,000 people living in Gaza, most of them civilians.

The president evidently has taken heat even from within his own family. Mr. Biden told Muslim community leaders at the White House on Tuesday evening that the first lady, Jill Biden, had weighed in , telling him, “Stop it, stop it now, Joe.”

Julian E. Barnes , Katie Rogers and David E. Sanger contributed reporting from Washington, Patrick Kingsley from Jerusalem and Lara Jakes from Brussels.

— Peter Baker Reporting from Washington

A call for early elections by a member of Netanyahu’s war cabinet highlights the domestic pressure he is under.

Prime Minister Benjamin Netanyahu of Israel is facing challenges on multiple fronts, with his domestic support appearing to erode at a time when international frustration with the war in Gaza has reached new heights.

The Israeli leader has come under ever-sharper criticism from allies like the United States as the civilian death toll climbs in Gaza, and the Israeli military’s killing there this week of seven aid workers has heightened global anger. President Biden spoke with Mr. Netanyahu on Thursday, telling him that “the strikes on humanitarian workers and the overall humanitarian situation are unacceptable.”

At home, Mr. Netanyahu has been confronted with protests and divisions within his governing coalition.

A call Wednesday night for early elections from a former general who is a key member of Mr. Netanyahu’s war cabinet heaped more pressure on the prime minister. Benny Gantz, a popular political rival to Mr. Netanyahu, said that elections should be held in September — around the one-year mark of the war. (New elections in Israel are not legally required until late October 2026.)

“This agreed-upon date for elections will leave us time to continue the security effort, and it will allow Israeli citizens to know that we will soon need to renew the trust between us,” he told a news conference. “It will prevent the rupture among the people.”

Mr. Gantz’s remarks — which featured prominently on Israeli news websites on Thursday — underscored how government unity in the aftermath of the Oct. 7 attack on Israel is showing signs of strain nearly six months into the war.

A departure by Mr. Gantz’s party would not topple Mr. Netanyahu’s far-right coalition on its own, which holds 64 seats in the 120-member Parliament. But it would dismantle the emergency wartime unity government formed after the Hamas-led attack on Oct. 7, potentially creating even more momentum in favor of a push for elections.

Mr. Gantz’s words also echoed the calls of thousands of anti-government protesters who filled the streets outside the Israeli Parliament in Jerusalem this week in a four-day demonstration to demand early elections and Mr. Netanyahu’s ouster.

At the same time, Mr. Netanyahu is facing sharp criticism from his far-right coalition partners , Itamar Ben-Gvir and Bezalel Smotrich, over any indication that he is hesitating in the war against Hamas or in the expansion of Israeli settlements in the occupied West Bank.

The pressure comes as the Biden administration’s frustration with Mr. Netanyahu appears to be coming to a head. The 30-minute call between Mr. Netanyahu and Mr. Biden on Thursday came a day after Defense Secretary Lloyd J. Austin III had a tense call with his Israeli counterpart, Yoav Gallant.

Mr. Austin upbraided Mr. Gallant over Israel’s deadly attack on the aid workers, according to the Pentagon’s account of the call , expressing “outrage” in remarks that demonstrated a significant change in tone from the American secretary’s previous calls with the Israeli defense minister.

Despite the tough language, there was no indication that Mr. Austin had threatened to halt the flow of American munitions to Israel or place conditions on their transfer, as many congressional Democrats are now urging.

Adam Rasgon , Aaron Boxerman , Johnatan Reiss , Peter Baker and Eric Schmitt contributed reporting.

— Cassandra Vinograd reporting from Jerusalem

World Central Kitchen demands an independent investigation into Israel’s deadly strike.

World Central Kitchen on Thursday called for an independent investigation into the killing by Israeli forces of seven of its staff members this week as they worked to deliver aid in Gaza.

Governments around the world have condemned the killing of the workers . They included a man from Gaza and citizens of Australia, Britain and Poland, as well as a dual citizen of Canada and the United States.

Prime Minister Benjamin Netanyahu of Israel has said that Israel “deeply regrets” the strikes, in which the military fired upon three vehicles carrying the aid workers on a coastal road in Gaza on Monday night. He said that Israel would make sure it did not happen again.

Israel’s military chief of staff, Lt. Gen. Herzi Halevi, said on Tuesday that the attack followed a misidentification, and that the Israeli military had started an investigation. But World Central Kitchen, the disaster relief organization founded by the Spanish chef José Andrés, issued a statement Thursday saying that was not enough.

“We have asked the governments of Australia, Canada, the United States of America, Poland and the United Kingdom to join us in demanding an independent, third-party investigation into these attacks, including whether they were carried out intentionally or otherwise violated international law,” the group said .

Other Israeli actions in Gaza have prompted similar calls. In one example, António Guterres, the U.N. secretary general, said in February that there needed to be an independent investigation of an incident in which dozens of people died while trying to collect aid, after Israeli forces opened fire and there was a stampede. To date, no such investigation has begun.

World Central Kitchen also called on Israel to preserve any documentation related to the strikes, and pushed back on Mr. Netanyahu’s assertion that the mistake was something that “happens in war.”

“This was a military attack that involved multiple strikes and targeted three W.C.K. vehicles,” the statement said. “All three vehicles were carrying civilians; they were marked as W.C.K. vehicles; and their movements were in full compliance with Israeli authorities.”

— Matthew Mpoke Bigg

Israel’s military cancels leave for combat units and jams GPS signals.

Israel’s military said on Thursday that it was canceling leave for combat units, calling up more reservists and blocking GPS signals.

The Israeli military did not explicitly cite the reason behind the moves. Israeli newspapers said they came amid fears of an increased threat from Iran , a prospect Prime Minister Benjamin Netanyahu alluded to in remarks to his Security Cabinet on Thursday night.

“For years, Iran has been acting against us both directly and via its proxies; therefore, Israel is acting against Iran and its proxies, defensively and offensively,” he said, without directly referring to the military’s moves. “We will know how to defend ourselves, and we will act according to the simple principle of whoever harms us or plans to harm us, we will harm them.”

President Ebrahim Raisi of Iran has vowed to punish Israel for killing top Iranian commanders this week in an airstrike in Syria. The attack was one of the deadliest in a decades-long shadow war between the two enemies, and American officials have voiced concerns that it could prompt retaliatory strikes against Israel or its ally, the United States.

The Israeli military said on Wednesday night that it had decided to draft reserve soldiers for its aerial defense unit. It did not provide further details.

An announcement about pausing leave for all combat units came in another brief statement, issued on Thursday morning. The military said the decision — which it described as temporary — was taken given “the latest situational assessment,” adding that Israel is “at war and the deployment of forces is under continuous assessment.”

A military spokesman, Rear Adm. Daniel Hagari, said later on Thursday that Israel also had been disrupting GPS signals over the past day to intercept any threats. He did not attribute those threats to Iran or any group or country in particular.

“During the war, we dealt with a large number of threats launched toward Israel — missiles, UAVs and cruise missiles,” he told a news briefing, referring to unmanned aerial vehicles, like drones, and adding that “most of them were manufactured in Iran.”

The moves come as Israel’s military is under strain from months of fighting against Hamas in Gaza. Reservists have been called to serve longer or additional tours of duty, and a fierce national debate over whether ultra-Orthodox Jews should be required to join the army has been reignited.

Mr. Netanyahu has vowed to press on in Gaza with a ground invasion of the southern city of Rafah, where more than a million Palestinians have sought refuge. His promise to invade Rafah comes despite mounting calls for a cease-fire and international criticism over Israel’s conduct in the war.

U.S. officials have expressed alarm over the scale of civilian deaths in Gaza and warned that Israel’s plans to invade Rafah could lead to catastrophe. Israel’s deadly strikes on a convoy of aid workers this week amplified those concerns, prompting sharp critiques from President Biden and Defense Secretary Lloyd J. Austin III.

Johnatan Reiss contributed reporting.

— Cassandra Vinograd Reporting from Jerusalem

More than 600 lawyers and retired judges call on the U.K. government to end arms sales to Israel.

The British government is coming under escalating pressure to suspend arms sales to Israel after the strike on a convoy in Gaza that killed seven aid workers , including three Britons. More than 600 lawyers and retired judges sent a letter to the government, arguing that the sales violated international law.

Citing the risk of famine among Palestinians, a potential Israeli military assault on the city of Rafah and a finding of the U.N.’s top court that there was a “plausible risk” of genocide in Gaza, the lawyers urged Prime Minister Rishi Sunak to “suspend the provision of weapons and weapons systems” to Israel.

“Serious action,” the 17-page letter sent on Wednesday concluded, “is moreover needed to avoid U.K. complicity in grave breaches of international law, including potential violations of the Genocide Convention.”

Among the signatories are Brenda Hale, a former president of Britain’s Supreme Court; Jonathan Sumption and Nicholas Wilson, former justices on the court; and dozens of the country’s most prominent lawyers.

Mr. Sunak has hardened his criticism of Israel’s conduct of the war in recent weeks, while stopping short of punitive measures. On Tuesday, he told Prime Minister Benjamin Netanyahu of Israel that the strike on the World Central Kitchen convoy, in which the three Britons were killed, was “appalling.”

But Mr. Sunak has not signaled he is considering a halt to arms sales. Speaking to The Sun, a London tabloid, on Wednesday, he said, “We’ve always had a very careful export licensing regime that we adhere to. There are a set of rules, regulations and procedures that we’ll always follow.”

Britain’s arms trade with Israel is nowhere near that of the United States. Grant Shapps, the defense secretary, told Parliament that British exports to Israel totaled 42 million pounds ($53 million) in 2022, a figure he described as “relatively small.” It sells parts for military aircraft, assault rifles and explosive devices. Under a 10-year agreement reached in 2016, the United States provides $3.8 billion in annual military aid to Israel.

But the strike on the aid convoy has provoked fury across Britain, dominating the front pages of newspapers and TV news broadcasts. The family of one of the three British victims, John Chapman, said in a statement, “He died trying to help people and was subject to an inhumane act.”

Britain summoned Israel’s ambassador to lodge a formal objection and demanded an investigation into the strike, which Mr. Netanyahu characterized as a tragic accident in the fog of war.

That explanation is unlikely to quiet the growing chorus of condemnation. Several members of Parliament from Mr. Sunak’s Conservative Party have also demanded that arms sales be halted, as has Peter Ricketts, who was national security adviser to David Cameron, the current foreign secretary, when he was prime minister.

“Sometimes in conflict you get a moment where there is such global outrage that it crystallizes a sense that things can’t go on like this,” Mr. Ricketts said to the BBC on Wednesday. “I hope that this awful incident will serve that purpose.”

Mr. Cameron, who was in Brussels on Thursday for a second day of meetings of NATO foreign ministers, said Israel needed not only to allow more humanitarian aid into Gaza, but also to make sure that the convoys were able to transport it throughout the enclave without further lethal incidents.

“Britain will be watching very closely to make sure that that happens,” Mr. Cameron said to reporters on Wednesday.

The Labour Party, which holds a double-digit lead over the Conservatives in opinion polls, said Britain should suspend arms sales if Israel is found to have violated international law. “I must say that I do have very serious concerns,” David Lammy, the party’s shadow foreign secretary, told reporters.

— Mark Landler reporting from London

Netanyahu Faces Pressure at Home and Abroad, From Foes and Friends

Prime Minister Benjamin Netanyahu of Israel is facing challenges on multiple fronts, with his domestic support appearing to erode at a time when international fury and frustration over the war in Gaza have reached new heights.

The Israeli leader has come under sharper criticism from allies like the United States as the civilian death toll climbs in Gaza, and the Israeli military’s killing there this week of seven aid workers has heightened global anger.

On Thursday, President Biden and Secretary of State Antony J. Blinken both suggested that American support for Israel was not unconditional in remarks that laid bare the growing divisions between Washington and Jerusalem.

In a phone call with Mr. Netanyahu, Mr. Biden called the strikes on relief workers and the broader humanitarian crisis in Gaza “unacceptable,” according to a White House statement.

“He made clear the need for Israel to announce and implement a series of specific, concrete and measurable steps to address civilian harm, humanitarian suffering and the safety of aid workers,” the White House statement said. “He made clear that U.S. policy with respect to Gaza will be determined by our assessment of Israel’s immediate action on these steps.”

Speaking to reporters at NATO headquarters in Brussels, Mr. Blinken said, “With regard to our policy in Gaza, look, I’ll just say this: If we don’t see the changes that we need to see, there’ll be changes in our own policy.”

Within hours of the phone call, a spokeswoman for the U.S. National Security Council had released a statement announcing that, at Mr. Biden’s request, Israel would allow more aid crossings in Gaza. The statement said Israel had agreed to use the Ashdod port to direct aid into Gaza, to open the Erez crossing into northern Gaza for the first time since the Hamas terrorist attack on Oct. 7 and to significantly increase deliveries from Jordan.

At home, Mr. Netanyahu, who has outlasted many predictions of his political demise, has been confronted with protests, divisions within his government and falling approval ratings in opinion polls.

On Wednesday night, Benny Gantz, a former general who is a key member of Mr. Netanyahu’s war cabinet, heaped more pressure on the prime minister by calling for early elections . A popular political rival to Mr. Netanyahu, Mr. Gantz said that elections should be held in September — just before the one-year mark of the war. (New elections in Israel are not legally required until late October 2026.)

Elections in September “will leave us time to continue the security effort, and it will allow Israeli citizens to know that we will soon need to renew the trust between us,” he said at a news conference. “It will prevent the rupture among the people.”

Mr. Gantz’s remarks, which Israeli news websites featured prominently on Thursday, underscored how government unity since the Oct. 7 attack on Israel was showing signs of strain nearly six months into the war. An opposition leader, Mr. Gantz crossed parliamentary lines after the attack to join the Netanyahu war cabinet as an emergency measure.

Mr. Gantz did not suggest he would quit the war cabinet, and if he were to, that alone would not topple the government; his centrist party is not part of Mr. Netanyahu’s far-right governing coalition, which holds 64 seats in the 120-member Parliament. But it would dismantle the emergency wartime leadership team formed after Oct. 7, along with the air of solidarity it created, potentially creating more momentum for new elections.

Mr. Gantz’s words echoed the calls of thousands of anti-government protesters who filled the streets outside the Israeli Parliament in Jerusalem this week in a four-day demonstration to demand early elections and Mr. Netanyahu’s ouster.

At the same time, Mr. Netanyahu has faced sharp criticism from his far-right coalition partners , Itamar Ben-Gvir and Bezalel Smotrich, over any indication that he is hesitating in the war against Hamas or in the expansion of Israeli settlements in the occupied West Bank. Unlike Mr. Gantz, they have the power to make the government fall and to force elections by leaving the coalition.

The pressure comes as Biden administration officials are expressing more open frustration with Mr. Netanyahu’s prosecution of the war and the humanitarian crisis in Gaza.

In a tense phone call on Wednesday, the U.S. secretary of defense, Lloyd J. Austin III, criticized his Israeli counterpart, Yoav Gallant, over the deadly attack on the aid workers, including a dual U.S.-Canadian citizen. According to a Pentagon account of the call, Mr. Austin expressed “outrage” at the attack — a significant change in tone from their previous calls.

Despite the tough language, the Biden administration did not directly threaten to halt the flow of American munitions to Israel or place conditions on their transfer, as many congressional Democrats are now urging.

“I’m not going to preview any potential policy decisions coming forward,” John F. Kirby, a White House spokesman, told reporters at a news conference on Thursday. “What we want to see are some real changes on the Israeli side,” he said, including a significant increase in humanitarian aid, additional border crossings into Gaza and a reduction in violence against civilians and aid workers.

Israel has called the strike a tragic mistake that resulted from a “misidentification” but has not offered further details.

Another Israeli ally, Britain, is also coming under more pressure to curtail its support for Israel; three of the seven World Central Kitchen workers who were killed were Britons. On Wednesday, more than 600 lawyers and retired judges sent a letter to the British government urging it to suspend weapon sales to Israel, arguing that they violated international law.

The letter cited the risk of famine in Gaza, a planned Israeli military assault on the crowded city of Rafah in southern Gaza and a finding by the U.N.’s top court that there was a “plausible risk” of genocide in Gaza.

Among the signatories were Brenda Hale, a former president of Britain’s Supreme Court; Jonathan Sumption and Nicholas Wilson, former justices on the court; and dozens of the country’s most prominent lawyers.

The international pressure to suspend military sales to Israel came as the Israeli military said that it was canceling leave for combat units and blocking GPS signals. The Israeli military did not explicitly cite the reason behind the moves, but Israeli newspapers noted that it came amid fears of an increased threat from Iran .

Israeli officials have also suggested that increased cross-border fighting between their forces and Hezbollah, the Lebanese militia backed by Iran, could prompt a much larger military response by Israel than it has mounted so far.

Iranian leaders have vowed to punish Israel for killing top Iranian commanders this week in an airstrike in Syria. The attack was one of the deadliest in a decades-long shadow war between the two enemies, and American officials have voiced concerns that it could prompt retaliatory strikes against Israel or the United States.

Israel said on Wednesday night that it had decided to mobilize reserve soldiers for its Aerial Defense unit. On Thursday, it said it was pausing leave for all combat units given “the latest situational assessment.”

Rear Adm. Daniel Hagari, a military spokesman, said Israel had also been disrupting GPS signals to intercept any threats.

“During the war, we dealt with a large number of threats launched toward Israel” including missiles and drones, he said at a news briefing on Thursday, adding that “most of them were manufactured in Iran.”

As outrage continues to boil over the killing of the aid workers this week, their employer, World Central Kitchen, called for an independent investigation into the attack and asked Australia, Britain, Canada, the United States and Poland, whose citizens were among the victims, to join it in demanding an outside inquiry.

World Central Kitchen also called on Israel to preserve documentation related to the strikes and pushed back on Mr. Netanyahu’s assertion that strikes, while “tragic” and unintentional, were something that “happens in war.”

Reporting was contributed by Lara Jakes , Adam Rasgon , Johnatan Reiss , Eric Schmitt , Mark Landler , Katie Rogers and Michael Levenson .

— Cassandra Vinograd ,  Victoria Kim and Matthew Mpoke Bigg

String of Israeli Errors Led to Fatal Attack on Aid Convoy, Military Says

A series of Israeli failures, including a breakdown in communication and violations of the rules of engagement, led to the deadly airstrikes that killed seven humanitarian aid workers in Gaza this week, senior Israeli military officials said on Friday.

The military officials said that the officers who ordered the strikes on the aid convoy had violated the army’s protocols, in part by opening fire on the basis of insufficient and erroneous evidence that a passenger in one of the cars was armed.

The attack prompted a wave of international outrage and renewed questions about whether Israeli forces on the ground in Gaza properly vet targets before unleashing deadly force. Israel has come under increasing pressure over the high civilian death toll in its six-month war in Gaza . The strikes on the aid workers prompted President Biden for the first time to say he would leverage U.S. aid to influence the conduct of the war against Hamas.

On Friday, the Israeli military announced that two officers — a reserve colonel and a major — would be dismissed from their positions. Lt. Gen. Herzi Halevi, the Israeli military’s chief of staff, had also decided to formally reprimand the head of Israel’s southern command, as well as two other senior officers, the military said in a statement .

The military said the “grave mistake” had stemmed from “a serious failure due to a mistaken identification, errors in decision-making, and an attack contrary to the Standard Operating Procedures.”

“It’s a tragedy,” Rear Adm. Daniel Hagari, the Israeli military’s chief spokesman, told reporters in a briefing on Thursday night. “It’s a serious event that we’re responsible for, and it shouldn’t have happened.”

World Central Kitchen, the relief group whose aid workers were killed, called the Israeli military’s statements “cold comfort” and reiterated its call for an independent inquiry. The aid organization’s operations — which have distributed millions of meals to Gazans — remained suspended, the group said.

“It’s not enough to simply try to avoid further humanitarian deaths, which have now approached close to 200,” the group’s founder, José Andrés, said in a statement . “All civilians need to be protected, and all innocent people in Gaza need to be fed and safe. And all hostages must be released.”

According to the military, Israeli forces began striking the World Central Kitchen convoy at 10:09 p.m. on Monday, as the vehicles made their way along Gaza’s coast. The attack killed six foreign nationals and a Palestinian, all of whom had worked to handle the food aid that had arrived in Gaza by sea.

Like many aid groups, the World Central Kitchen had sought to ensure its workers’ safety in Gaza, where, according to local health officials, Israel’s campaign against Hamas has killed more than 32,000 people.

The workers had coordinated their mission in advance with the Israeli military, and the roofs of the vehicles had been marked with the World Central Kitchen’s logo.

Despite those safeguards, a series of critical errors led the troops to open fire on the convoy, according to the results of the military’s preliminary inquiry. Drone footage, the inquiry found, had not captured the organization’s logo in the dark; some officers did not review documentation showing that the convoy included civilian cars; and a drone operator had identified incorrectly an aid worker, who was most likely carrying a bag, as a member of an armed Palestinian group with a gun.

The seven aid workers had arrived in northern Gaza earlier on Monday to help deliver more than 100 tons of food aid, according to World Central Kitchen. Their trucks left around 9 p.m. and headed south for the group’s warehouse, according to the Israeli military.

Along the coastal road, the trucks met with cars who joined their convoy, according to the military. Shortly after, a gunman appeared to fire a single round from the roof of one of the trucks, according to Maj. Gen. Yoav Har-Even, a reserve officer who oversees the military’s investigations into potential cases of wartime misconduct.

After the convoy arrived at the warehouse, Israeli drone footage captured what officials said were more gunmen at the scene. The Israeli military screened videos for reporters at the briefing on Thursday. The New York Times could not independently verify the military’s video.

The officers were convinced that the scene they had witnessed resembled what they said were previous attempts by Hamas militants to seize humanitarian aid in Gaza, the officials said. Hamas did not immediately respond to a request for comment about the accusation.

The cars then left the warehouse — three cars went south and one went north, the military officials said.

Within four minutes, at least one Israeli drone struck each of the three vehicles in the southbound convoy as they traveled south one behind the other, killing all seven passengers, the Israeli officials said.

Some aid workers in the vehicle that was first struck fled to the next vehicle for protection, the officials said. That vehicle was hit, too.

The soldiers’ decision to fire on the second and third car, assuming wrongly that they were also harboring militants, failed to meet the Israeli military’s open-fire protocols, the officials said.

“This was against the rules of engagement,” General Har-Even said.

A fundamental failure, the officials said, was that the drone operator and his commanding officers were unaware that the humanitarian convoy included not only the aid trucks but also several civilian cars.

The soldiers, uninformed that World Central Kitchen had received approval from the army for the cars, assumed that the additional vehicles were not part of the convoy and had been carrying armed Palestinian militants, the officials added.

Asked why the soldiers had been unaware, General Har-Even said that certain officers had not seen the coordination documentation. In reality, the cars were carrying the aid workers.

“No excuses,” Gen. Har-Even said, describing the communications failure.

Critics have said that the Israeli military has shown a disregard for Palestinian civilians in its campaign to root out Hamas, the militant group whose deadly attack on Oct. 7 killed 1,200 people in Israel, mostly civilians, according to Israeli officials.

Asked whether the military was concerned that more cases of indiscriminate fire had occurred over months of intensive Israeli fire across the Gaza Strip, Admiral Hagari said that the military took pains to protect Palestinian civilians.

Referring to the strikes on the aid convoy, Prime Minister Benjamin Netanyahu said Israel “deeply regrets the tragic incident.”

During a phone call with Mr. Netanyahu on Thursday, the White House said, Mr. Biden described the attack on the aid convoy and the overall humanitarian situation in Gaza as “unacceptable.”

Mr. Biden threatened to condition future support for Israel on how it addresses his concerns about civilian casualties and the humanitarian crisis in Gaza, prompting Israel to commit to permitting more food and other supplies into the besieged enclave.

— Aaron Boxerman and Adam Rasgon Reporting from Tel Aviv and Jerusalem

In a televised show of unity and defiance, Iran and its proxy militias denounce Israel and the U.S.

The leaders of Iran and the militia groups it backs around the Middle East made an unusual televised show of unity and defiance on Wednesday, railing against Israel and the United States, as war rages in the Gaza Strip.

On a joint broadcast, the leaders of a group that calls itself the Axis of Resistance, speaking from different locations, delivered fiery speeches ahead of the upcoming Quds Day, a show of solidarity with Palestinians held each year on the last Friday of Ramadan.

The war between Israel and Hamas gave this year’s iteration a sharper edge than usual. The broadcast also came just days after Israel struck an Iranian embassy compound in Damascus, Syria, killing three generals of Iran’s Quds Force and four other Iranian officers in one of the deadliest attacks in the yearslong shadow war between Israel and Iran.

President Ebrahim Raisi of Iran said that Israel would be punished and made to regret its attack in Damascus. He focused most of his speech on what he called Israel’s demise in world public opinion and said any normalization of ties with the Jewish state — referring to Saudi Arabia — would be akin to “betting on a dead horse.”

Last April, a similar event took place to commemorate Quds Day, with a broader list of speakers representing political and military leaders from across the Arab world and Iran. This year’s event, however, was tightly focused on militant groups supported by Iran that have been fighting Israel on multiple fronts since Hamas’s Oct. 7 assault on Israel, which they refer to as Al Aqsa Flood.

The speakers, in addition to Mr. Raisi, included Ismail Haniyeh, the political leader of Hamas; Hassan Nasrallah, the leader of the Lebanese group Hezbollah; Ziad al-Nakhaleh, the leader of Palestinian Islamic Jihad, which, like Hamas, is active in Gaza; Abdul-Malik al-Houthi, the leader of the Houthi movement, which controls a large part of Yemen; and Hadi al-Ameri, the leader of Hashd al-Shaabi, an Iraqi Shiite militia.

“The Al Aqsa Flood united the Muslim people and this collective unity has manifested with the help of Iran on battlefields in Lebanon, Palestine and Iraq,” Mr. Haniyeh said. He said that the United States had aided crimes committed by Israel by supporting it financially, providing it with sophisticated weaponry and vetoing cease-fire resolutions at the United Nations Security Council.

Since Oct. 7, Hezbollah has launched daily attacks against Israel after a long lull in fighting, raising fears of a wider regional war, and the Houthis for the first time have launched drones and missiles against Israel and vessels in the Red Sea, disrupting international shipping.

Iran has tried to calibrate its response, applying pressure on Israel while avoiding all-out war. Earlier this year, it made an effort to rein in Iraqi militias , including Hashd al-Shaabi, that had been firing on U.S. bases.

Mr. Nasrallah, the Hezbollah leader, urged his followers not to “overlook the achievements of the resistance” in six months of battle with Israel.

Mr. al-Ameri focused most of his speech on the resolve of militant groups to force the American military to withdraw from Iraq saying, “we are steadfast and there is no turning back.”

Separate from that broadcast event, Ayatollah Ali Khamenei, Iran’s supreme leader, held a large meeting on Wednesday with government, military and religious leaders of the country, and pledged that Israel would receive “a slap” for killing Iranian officers in Syria. The crowd, fists in the air, chanted back, “Death to Israel.”

— Farnaz Fassihi and Hwaida Saad

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14.1 Assignment of Contract Rights

Learning objectives.

• Understand what an assignment is and how it is made.
• Recognize the effect of the assignment.
• Know when assignments are not allowed.
• Understand the concept of assignor’s warranties.

The Concept of a Contract Assignment

Contracts create rights and duties. By an assignment The passing or delivering by one person to another of the right to a contract benefit. , an obligee One to whom an obligation is owed. (one who has the right to receive a contract benefit) transfers a right to receive a contract benefit owed by the obligor One who owes an obligation. (the one who has a duty to perform) to a third person ( assignee One to whom the right to receive benefit of a contract is passed or delivered. ); the obligee then becomes an assignor One who agrees to allow another to receive the benefit of a contract. (one who makes an assignment).

The Restatement (Second) of Contracts defines an assignment of a right as “a manifestation of the assignor’s intention to transfer it by virtue of which the assignor’s right to performance by the obligor is extinguished in whole or in part and the assignee acquires the right to such performance.” Restatement (Second) of Contracts, Section 317(1). The one who makes the assignment is both an obligee and a transferor. The assignee acquires the right to receive the contractual obligations of the promisor, who is referred to as the obligor (see Figure 14.1 "Assignment of Rights" ). The assignor may assign any right unless (1) doing so would materially change the obligation of the obligor, materially burden him, increase his risk, or otherwise diminish the value to him of the original contract; (2) statute or public policy forbids the assignment; or (3) the contract itself precludes assignment. The common law of contracts and Articles 2 and 9 of the Uniform Commercial Code (UCC) govern assignments. Assignments are an important part of business financing, such as factoring. A factor A person who pays money to receive another’s executory contractual benefits. is one who purchases the right to receive income from another.

Figure 14.1 Assignment of Rights

Method of Assignment

Manifesting assent.

To effect an assignment, the assignor must make known his intention to transfer the rights to the third person. The assignor’s intention must be that the assignment is effective without need of any further action or any further manifestation of intention to make the assignment. In other words, the assignor must intend and understand himself to be making the assignment then and there; he is not promising to make the assignment sometime in the future.

Under the UCC, any assignments of rights in excess of $5,000 must be in writing, but otherwise, assignments can be oral and consideration is not required: the assignor could assign the right to the assignee for nothing (not likely in commercial transactions, of course). Mrs. Franklin has the right to receive $750 a month from the sale of a house she formerly owned; she assigns the right to receive the money to her son Jason, as a gift. The assignment is good, though such a gratuitous assignment is usually revocable, which is not the case where consideration has been paid for an assignment.

Acceptance and Revocation

For the assignment to become effective, the assignee must manifest his acceptance under most circumstances. This is done automatically when, as is usually the case, the assignee has given consideration for the assignment (i.e., there is a contract between the assignor and the assignee in which the assignment is the assignor’s consideration), and then the assignment is not revocable without the assignee’s consent. Problems of acceptance normally arise only when the assignor intends the assignment as a gift. Then, for the assignment to be irrevocable, either the assignee must manifest his acceptance or the assignor must notify the assignee in writing of the assignment.

Notice to the obligor is not required, but an obligor who renders performance to the assignor without notice of the assignment (that performance of the contract is to be rendered now to the assignee) is discharged. Obviously, the assignor cannot then keep the consideration he has received; he owes it to the assignee. But if notice is given to the obligor and she performs to the assignor anyway, the assignee can recover from either the obligor or the assignee, so the obligor could have to perform twice, as in Exercise 2 at the chapter’s end, Aldana v. Colonial Palms Plaza . Of course, an obligor who receives notice of the assignment from the assignee will want to be sure the assignment has really occurred. After all, anybody could waltz up to the obligor and say, “I’m the assignee of your contract with the bank. From now on, pay me the $500 a month, not the bank.” The obligor is entitled to verification of the assignment.

Effect of Assignment

General rule.

An assignment of rights effectively makes the assignee stand in the shoes of An assignee takes no greater rights than his assignor had. the assignor. He gains all the rights against the obligor that the assignor had, but no more. An obligor who could avoid the assignor’s attempt to enforce the rights could avoid a similar attempt by the assignee. Likewise, under UCC Section 9-318(1), the assignee of an account is subject to all terms of the contract between the debtor and the creditor-assignor. Suppose Dealer sells a car to Buyer on a contract where Buyer is to pay $300 per month and the car is warranted for 50,000 miles. If the car goes on the fritz before then and Dealer won’t fix it, Buyer could fix it for, say, $250 and deduct that $250 from the amount owed Dealer on the next installment (called a setoff). Now, if Dealer assigns the contract to Assignee, Assignee stands in Dealer’s shoes, and Buyer could likewise deduct the $250 from payment to Assignee.

The “shoe rule” does not apply to two types of assignments. First, it is inapplicable to the sale of a negotiable instrument to a holder in due course (covered in detail Chapter 23 "Negotiation of Commercial Paper" ). Second, the rule may be waived: under the UCC and at common law, the obligor may agree in the original contract not to raise defenses against the assignee that could have been raised against the assignor. Uniform Commercial Code, Section 9-206. While a waiver of defenses Surrender by a party of legal rights otherwise available to him or her. makes the assignment more marketable from the assignee’s point of view, it is a situation fraught with peril to an obligor, who may sign a contract without understanding the full import of the waiver. Under the waiver rule, for example, a farmer who buys a tractor on credit and discovers later that it does not work would still be required to pay a credit company that purchased the contract; his defense that the merchandise was shoddy would be unavailing (he would, as used to be said, be “having to pay on a dead horse”).

For that reason, there are various rules that limit both the holder in due course and the waiver rule. Certain defenses, the so-called real defenses (infancy, duress, and fraud in the execution, among others), may always be asserted. Also, the waiver clause in the contract must have been presented in good faith, and if the assignee has actual notice of a defense that the buyer or lessee could raise, then the waiver is ineffective. Moreover, in consumer transactions, the UCC’s rule is subject to state laws that protect consumers (people buying things used primarily for personal, family, or household purposes), and many states, by statute or court decision, have made waivers of defenses ineffective in such consumer transactions A contract for household or domestic purposes, not commercial purposes. . Federal Trade Commission regulations also affect the ability of many sellers to pass on rights to assignees free of defenses that buyers could raise against them. Because of these various limitations on the holder in due course and on waivers, the “shoe rule” will not govern in consumer transactions and, if there are real defenses or the assignee does not act in good faith, in business transactions as well.

When Assignments Are Not Allowed

The general rule—as previously noted—is that most contract rights are assignable. But there are exceptions. Five of them are noted here.

Material Change in Duties of the Obligor

When an assignment has the effect of materially changing the duties that the obligor must perform, it is ineffective. Changing the party to whom the obligor must make a payment is not a material change of duty that will defeat an assignment, since that, of course, is the purpose behind most assignments. Nor will a minor change in the duties the obligor must perform defeat the assignment.

Several residents in the town of Centerville sign up on an annual basis with the Centerville Times to receive their morning paper. A customer who is moving out of town may assign his right to receive the paper to someone else within the delivery route. As long as the assignee pays for the paper, the assignment is effective; the only relationship the obligor has to the assignee is a routine delivery in exchange for payment. Obligors can consent in the original contract, however, to a subsequent assignment of duties. Here is a clause from the World Team Tennis League contract: “It is mutually agreed that the Club shall have the right to sell, assign, trade and transfer this contract to another Club in the League, and the Player agrees to accept and be bound by such sale, exchange, assignment or transfer and to faithfully perform and carry out his or her obligations under this contract as if it had been entered into by the Player and such other Club.” Consent is not necessary when the contract does not involve a personal relationship.

Assignment of Personal Rights

When it matters to the obligor who receives the benefit of his duty to perform under the contract, then the receipt of the benefit is a personal right The right or duty of a particular person to perform or receive contract duties or benefits; cannot be assigned. that cannot be assigned. For example, a student seeking to earn pocket money during the school year signs up to do research work for a professor she admires and with whom she is friendly. The professor assigns the contract to one of his colleagues with whom the student does not get along. The assignment is ineffective because it matters to the student (the obligor) who the person of the assignee is. An insurance company provides auto insurance covering Mohammed Kareem, a sixty-five-year-old man who drives very carefully. Kareem cannot assign the contract to his seventeen-year-old grandson because it matters to the insurance company who the person of its insured is. Tenants usually cannot assign (sublet) their tenancies without the landlord’s permission because it matters to the landlord who the person of their tenant is. Section 14.4.1 "Nonassignable Rights" , Nassau Hotel Co. v. Barnett & Barse Corp. , is an example of the nonassignability of a personal right.

Assignment Forbidden by Statute or Public Policy

Various federal and state laws prohibit or regulate some contract assignment. The assignment of future wages is regulated by state and federal law to protect people from improvidently denying themselves future income because of immediate present financial difficulties. And even in the absence of statute, public policy might prohibit some assignments.

Contracts That Prohibit Assignment

Assignability of contract rights is useful, and prohibitions against it are not generally favored. Many contracts contain general language that prohibits assignment of rights or of “the contract.” Both the Restatement and UCC Section 2-210(3) declare that in the absence of any contrary circumstances, a provision in the agreement that prohibits assigning “the contract” bars “only the delegation to the assignee of the assignor’s performance.” Restatement (Second) of Contracts, Section 322. In other words, unless the contract specifically prohibits assignment of any of its terms, a party is free to assign anything except his or her own duties.

Even if a contractual provision explicitly prohibits it, a right to damages for breach of the whole contract is assignable under UCC Section 2-210(2) in contracts for goods. Likewise, UCC Section 9-318(4) invalidates any contract provision that prohibits assigning sums already due or to become due. Indeed, in some states, at common law, a clause specifically prohibiting assignment will fail. For example, the buyer and the seller agree to the sale of land and to a provision barring assignment of the rights under the contract. The buyer pays the full price, but the seller refuses to convey. The buyer then assigns to her friend the right to obtain title to the land from the seller. The latter’s objection that the contract precludes such an assignment will fall on deaf ears in some states; the assignment is effective, and the friend may sue for the title.

Future Contracts

The law distinguishes between assigning future rights under an existing contract and assigning rights that will arise from a future contract. Rights contingent on a future event can be assigned in exactly the same manner as existing rights, as long as the contingent rights are already incorporated in a contract. Ben has a long-standing deal with his neighbor, Mrs. Robinson, to keep the latter’s walk clear of snow at twenty dollars a snowfall. Ben is saving his money for a new printer, but when he is eighty dollars shy of the purchase price, he becomes impatient and cajoles a friend into loaning him the balance. In return, Ben assigns his friend the earnings from the next four snowfalls. The assignment is effective. However, a right that will arise from a future contract cannot be the subject of a present assignment.

Partial Assignments

An assignor may assign part of a contractual right, but only if the obligor can perform that part of his contractual obligation separately from the remainder of his obligation. Assignment of part of a payment due is always enforceable. However, if the obligor objects, neither the assignor nor the assignee may sue him unless both are party to the suit. Mrs. Robinson owes Ben one hundred dollars. Ben assigns fifty dollars of that sum to his friend. Mrs. Robinson is perplexed by this assignment and refuses to pay until the situation is explained to her satisfaction. The friend brings suit against Mrs. Robinson. The court cannot hear the case unless Ben is also a party to the suit. This ensures all parties to the dispute are present at once and avoids multiple lawsuits.

Successive Assignments

It may happen that an assignor assigns the same interest twice (see Figure 14.2 "Successive Assignments" ). With certain exceptions, the first assignee takes precedence over any subsequent assignee. One obvious exception is when the first assignment is ineffective or revocable. A subsequent assignment has the effect of revoking a prior assignment that is ineffective or revocable. Another exception: if in good faith the subsequent assignee gives consideration for the assignment and has no knowledge of the prior assignment, he takes precedence whenever he obtains payment from, performance from, or a judgment against the obligor, or whenever he receives some tangible evidence from the assignor that the right has been assigned (e.g., a bank deposit book or an insurance policy).

Some states follow the different English rule: the first assignee to give notice to the obligor has priority, regardless of the order in which the assignments were made. Furthermore, if the assignment falls within the filing requirements of UCC Article 9 (see Chapter 28 "Secured Transactions and Suretyship" ), the first assignee to file will prevail.

Figure 14.2 Successive Assignments

Assignor’s Warranties

An assignor has legal responsibilities in making assignments. He cannot blithely assign the same interests pell-mell and escape liability. Unless the contract explicitly states to the contrary, a person who assigns a right for value makes certain assignor’s warranties Promises, express or implied, made by an assignor to the assignee about the merits of the assignment. to the assignee: that he will not upset the assignment, that he has the right to make it, and that there are no defenses that will defeat it. However, the assignor does not guarantee payment; assignment does not by itself amount to a warranty that the obligor is solvent or will perform as agreed in the original contract. Mrs. Robinson owes Ben fifty dollars. Ben assigns this sum to his friend. Before the friend collects, Ben releases Mrs. Robinson from her obligation. The friend may sue Ben for the fifty dollars. Or again, if Ben represents to his friend that Mrs. Robinson owes him (Ben) fifty dollars and assigns his friend that amount, but in fact Mrs. Robinson does not owe Ben that much, then Ben has breached his assignor’s warranty. The assignor’s warranties may be express or implied.

Key Takeaway

Generally, it is OK for an obligee to assign the right to receive contractual performance from the obligor to a third party. The effect of the assignment is to make the assignee stand in the shoes of the assignor, taking all the latter’s rights and all the defenses against nonperformance that the obligor might raise against the assignor. But the obligor may agree in advance to waive defenses against the assignee, unless such waiver is prohibited by law.

There are some exceptions to the rule that contract rights are assignable. Some, such as personal rights, are not circumstances where the obligor’s duties would materially change, cases where assignability is forbidden by statute or public policy, or, with some limits, cases where the contract itself prohibits assignment. Partial assignments and successive assignments can happen, and rules govern the resolution of problems arising from them.

When the assignor makes the assignment, that person makes certain warranties, express or implied, to the assignee, basically to the effect that the assignment is good and the assignor knows of no reason why the assignee will not get performance from the obligor.

• If Able makes a valid assignment to Baker of his contract to receive monthly rental payments from Tenant, how is Baker’s right different from what Able’s was?
• Able made a valid assignment to Baker of his contract to receive monthly purchase payments from Carr, who bought an automobile from Able. The car had a 180-day warranty, but the car malfunctioned within that time. Able had quit the auto business entirely. May Carr withhold payments from Baker to offset the cost of needed repairs?
• Assume in the case in Exercise 2 that Baker knew Able was selling defective cars just before his (Able’s) withdrawal from the auto business. How, if at all, does that change Baker’s rights?
• Why are leases generally not assignable? Why are insurance contracts not assignable?

A newsletter briefing on the health-care policy debate in Washington.

The GOP keeps pushing Medicaid work requirements, despite setbacks

with research by McKenzie Beard

Good morning. We’re Renuka Rayasam and Andy Miller, KFF Health News reporters in everyone’s favorite new battleground state, Georgia. (Sorry, Arizona.) Send your best tips on Gov. Brian Kemp (R) and Southern health policy to [email protected] and [email protected] . Not a subscriber? Sign up here .

Today’s edition: President Biden has enlisted Sen. Bernie Sanders (I-Vt.) to help boost his drug-price campaign. Dueling abortion rulings by the Florida Supreme Court are already transforming a once-lackluster race. But first …

Medicaid-for-work off to rocky start in Georgia. But other states are interested.

Work requirements in Medicaid expansion programs are back on the agenda in many statehouses — despite their lackluster track record.

In Mississippi, the idea has momentum from GOP lawmakers advancing legislation to expand Medicaid. In Kansas, the Democratic governor proposed work requirements to try to soften Republican opposition to expansion. (She’s had little luck, so far.)

The controversial policy even has fresh traction in states that expanded Medicaid years ago, including Idaho and Louisiana .

Just two states have implemented a special program to require low-income adults to prove they’re working in exchange for health coverage under Medicaid. In 2019, a court ended Arkansas’s initiative, but not before 18,000 people lost coverage.

Since then, only the signature Medicaid experiment of Georgia Gov. Brian Kemp (R), called Pathways to Coverage , has survived legal challenges and gotten off the ground.

Yet it’s off to a rocky start, with low enrollment and mounting administrative costs already exceeding $20 million . “It doesn’t work, and it’s perfectly clear in Georgia,” said Joan Alker , executive director and co-founder of the Georgetown Center for Children and Families .

Only about 3,500 people have enrolled so far . That’s a small fraction of the Georgians who would be eligible if the state adopted the Affordable Care Act’s Medicaid expansion without work requirements.

Some Georgia Republicans blocked a bill in March that would have authorized a full Medicaid expansion, arguing that Pathways needs more time. The program is just one part of an overall plan to move people into private insurance, Kemp spokesperson Garrison Douglas told us.

Work requirements can come with big administrative price tags, according to a 2019 report from the Government Accountability Office , which recommended that the Centers for Medicare & Medicaid Services consider administrative costs in waiver applications.

States have to set up technology to check compliance, plus hire staff to keep all the paperwork straight. Under Georgia’s plan, people earning up to the federal poverty level — $15,060 for an individual adult — must document that they’re working, in school, doing community service or performing other qualifying activities. Taking care of a child or parent doesn’t count.

Documents obtained by KFF Health News show that administrative costs along with consulting fees have absorbed more than 90 percent of the Georgia program’s spending. As of Dec. 31, about $2 million went to Medicaid managed-care companies; $24 million was spent on administration and consultants. The administrative costs are expected to balloon to $122 million over four years.

Critics argue that the red tape keeps people from getting health care. And while work requirements don’t significantly boost employment, simply providing health coverage can, according to a 2023 KFF brief .

But don’t expect the idea to disappear — especially if former president Donald Trump returns to the White House. The first Trump administration approved Medicaid work-requirement programs in 13 states .

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — an independent source of health policy research, polling and journalism.

White House prescriptions

Biden asks bernie sanders to help boost his drug-price campaign.

The Senate Health, Education, Labor and Pensions Committee chair heads to the White House today, where he is expected to join the president at 11 a.m. for remarks on inhaler price-cuts, our colleague Dan Diamond scooped.

Today’s event comes after a Sanders-led investigation prompted three drug companies to cap out-of-pocket costs for inhalers at $35 a month, down from several hundred dollars. The effort was bolstered by the Federal Trade Commission putting pressure on the industry’s “improper” inhaler patents.

Biden has also been touting his own efforts to lower drug prices, such as a plan for the government directly negotiate with the pharmaceutical industry, but voters (and some in the media) remain largely unaware of those efforts or have tuned out.

It’s an interesting contrast of political styles , with Biden overseeing sweeping legislation and Sanders mixing it up with individual companies. When it comes to this issue, each man can offer something the other wants.

The Biden-backed Inflation Reduction Act could deliver the transformative changes to the pharma industry that Sanders has long sought, assuming the law survives court challenges and the next president. Sanders, meanwhile, can offer an immediate drug-pricing win — something Biden is eager to show off to voters, given that the IRA remains years away from full implementation.

The White House speech is also something of a victory lap for Sanders , who fought Biden on health policy through the 2020 campaign and delayed the president’s National Institutes of Health nominee last year, but has since come to champion his one-time rival. “It’s clear that Biden has done far more than any other president in history” on drug prices, Sanders told Dan on Tuesday.

On the Hill

Steward skips field hearing on for-profit companies in health care.

On tap today: A Senate health, education, labor and pensions subcommittee will hold a field hearing in Boston to examine for-profit companies’ impact on health-care access. 

The hearing was spurred by ongoing financial troubles at Steward Health Care that have threatened the future of its Massachusetts hospitals, sparking concern among lawmakers about potential disruptions to care. The company’s CEO, Ralph de la Torre , declined an invitation to testify, according to subcommittee Chair Edward J. Markey (D-Mass.). 

Sen. Edward J. Markey (D-Mass.):

I will be addressing this and the many other harms that private equity and for-profit forces inflict on hospitals across the country at my hearing tomorrow in Boston. — Ed Markey (@SenMarkey) April 2, 2024

In other news from Capitol Hill …

• Rep. Brad Wenstrup (R-Ohio), chair of the panel investigating the coronavirus pandemic, is asking the editors of three major scientific journals to testify on the relationship between their publications and the federal government. 
• Republican leaders on the House Energy and Commerce Committee are urging the Government Accountability Office to study how NIH safeguards research funds from national security concerns related to the Chinese government. 

Reproductive wars

The fight for florida voters after abortion rulings begins.

A once-lackluster election season in Florida is poised to become a heated battleground after the state Supreme Court this week upheld the state’s strict abortion ban but also ruled that an amendment protecting abortion rights in Florida can go on the November ballot, The Post’s Lori Rozsa reports. 

One day after the rulings , President Biden ’s reelection team called Florida a “key state” and pledged to target voters there as part of a $30 million spring ad campaign. College Democrats distributed condoms emblazoned with the words “ protect abortion in Florida .” And students gave women tulips to raise awareness and register voters. 

Democrats face an uphill battle in the Sunshine State . In recent years, Florida has increasingly shifted toward becoming a bastion for the right, shedding its former distinction as a swing state. But in light of Monday’s rulings, Democrats probably see an opportunity to mobilize their base as well as the 3.5 million voters registered with no party affiliation. 

Across the aisle, Evan Power , the head of the Republican Party of Florida, said his party will focus on continuing to attract voters who “reject the radical agenda being pushed” by Democrats. 

“ I don’t think this issue is really that big of one ,” Power said in a text exchange. “Democrats made it their central argument in Florida in 2022 and lost big. We are adding voters because Republicans made promises and are delivering on them legislatively.”

Meanwhile …

The campaign arm for House Democrats is launching billboard advertisements aimed at vulnerable Republicans who supported legislation that could threaten in vitro fertilization. 

The Democratic Congressional Campaign Committee ’s five-figure ad buy includes static, digital and mobile billboards in eight swing districts criticizing House GOP candidates for backing the Life at Conception Act . The measure would have granted constitutional protections to embryos from “the moment of fertilization.” 

• Republican Reps. David Schweikert (Ariz.), Mike Garcia (Calif.) and Mariannette Miller-Meeks (Iowa) are among those targeted by the campaign. 

From our notebook

Is the u.s. prepared for a bird flu pandemic.

That’s been the big question after a Texas dairy worker was infected with the highly virulent virus.

More than half a dozen federal officials told The Post’s Rachel Roubein and Lena H. Sun that the risk to the general public remains low . But officials are still preparing for the possibility of additional human cases of bird flu, including testing components to create a vaccine and utilizing enhanced monitoring networks.

Because bird flu isn’t a novel virus, some experts say the country is better prepared to tackle such an outbreak than the coronavirus but cautioned against overconfidence. Two candidate vaccine viruses — essentially the building blocks that manufacturers use to produce a vaccine — appear well-matched to protect against the H5N1 strain circulating among dairy cattle and birds, according to federal health officials.

Meanwhile, the largest U.S. egg producer said Tuesday that it temporarily halted operations at one of its Texas facilities after detecting bird flu in chickens, The Post’s Andrew Jeong reports . Cal-Maine Foods said it culled about 1.6 million hens and 337,000 pullets (young hens) after some of its chickens at a Parmer County, Tex., facility tested positive for highly pathogenic avian influenza (HPAI).

In other health news

• The White House released its long-awaited plan to prevent drug shortages , including proposals to incentivize hospitals to adopt business practices that strengthen the supply chain. 
• The Centers for Medicare and Medicaid Services issued a final rule giving states the option to add routine adult dental health services as an essential health benefit. 
• Advocates working to enshrine abortion rights in Arizona’s constitution announced that they have collected enough voter signatures to put their amendment on the state’s November ballot. 

Health reads

‘No help here’: Florida abortion ruling leaves women with few options (By Caroline Kitchener | The Washington Post)

Lawsuit demands menthol cigarette ban following White House delays (By Jonathan Stempel | Reuters)

As obesity rises, Big Food and dietitians push “anti-diet” advice (By Sasha Chavkin, Caitlin Gilbert, Anjali Tsui and Anahad O’Connor | The Examination & The Washington Post )

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J.d. martinez nearing mets debut with minor-league assignment on tap.

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The Mets need some help for their lineup, and fast.

J.D. Martinez is getting closer to being ready to provide it.

Carlos Mendoza said prior to Thursday’s doubleheader against the Tigers at Citi Field that the veteran DH is scheduled to join one of the organization’s minor league affiliates “as soon as [Friday].”

Mendoza added they still need to come to a decision about where Martinez will end up, either with Triple-A Syracuse, Double-A Binghamton or Single-A Port St. Lucie.

And then they will determine when he’s ready to get to the majors — although it doesn’t seem as if he’ll be ready by Sunday for the final game against the Reds, which is the first day he’d be eligible.

“We’re getting close,’’ Mendoza said. “We’ve got to make a decision.”

As for the following series in Atlanta, Mendoza said, “Everything is on the table. We could see him at some point in that series [and there’s a] chance we won’t see him. We’ll see how he responds once he starts playing real games in the minor leagues.”

The 36-year-old Martinez has been getting at-bats at the team’s facility in Port St. Lucie as the Mets struggled through the first week of the regular season, with a mostly dormant offense.

Mendoza added they don’t want to rush Martinez back and Martinez will have a voice in the decision.

“He’s gonna have a strong opinion,’’ Mendoza said of Martinez, who signed with the Mets on March 23. “He knows himself better than anybody else [with] his routine and how detail-oriented he is with the feel for his swing and mechanics. We will consider those things. He’s getting a lot of at-bats, feeling good. Now we’ve got to take the next step.”

The most important thing for Mendoza is for Martinez to continue getting at-bats and reps in the field and on the bases to get back into form.

“We’ll take it one day at a time,’’ Mendoza said. “We want to do what’s right for J.D. and the team and make sure he’s not rushed and make sure not to put J.D. at risk.”

But the Mets remain confident they’ll see him soon.

The reports from Port St. Lucie, Mendoza said, have been, “Good for the most part. There are days when his timing [and] mechanics are off. He’s a very meticulous guy. … He’s moving in the right direction.”

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Pete Alonso’s ninth-inning homer in Game 2 gave him 500 RBIs for his career, making the first baseman the fastest in team history to reach the milestone.

He got there in 690 games, breaking David Wright’s previous record of 727 games.

Alonso called the mark “special.’’

Yohan Ramirez was active for the second game of Thursday’s doubleheader, having served his two-game suspension for throwing behind Milwaukee’s Rhys Hoskins on Saturday.

Ramirez was initially suspended for three games before he appealed the ban and it was reduced to two.

Francisco Alvarez, the hottest bat in the Mets’ shaky lineup, was not in the starting lineup for the second game, as Mendoza tries to manage his playing time.

He pinch hit for Omar Narvaez in the seventh, flied out and remained in the game.

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‘Building an authoritarian axis’: the Trump ‘envoy’ courting the global far right

Richard Grenell’s shadow foreign policy campaign is unsettling diplomats and threatens to collapse US interests

For Donald Trump , he is “my envoy”, the man apparently anointed as the former US president’s roving ambassador while he plots a return to the White House.

To critics , he is seen as “an online pest” and “a national disgrace” – and most importantly, the dark embodiment of what foreign policy in a second Trump administration would look like.

Meet Richard Grenell, vocal tribune of Trump’s America First credo on the international stage and the man hotly tipped to become secretary of state if the presumed Republican nominee beats Joe Biden in November’s presidential election.

A senior executive in the rightwing Newsmax cable channel, Grenell, 57, has crafted a persona as the archetypal Trump man, keen and ever-ready to troll liberals, allies and foreign statesmen in public forums and social media.

Grenell – who served as a rambunctious ambassador to Germany and acting director of national intelligence during Trump’s first term – has carved a niche as the articulator-in-chief of a Maga approach to global affairs that appears to echo his political master’s voice.

Seasoned analysts fear his hyperactivity is already unsettling US diplomats even while Trump is out of office.

In recent months, he has pitched up in Guatemala, where he tried to stymie US state department pleas for a peaceful transition of power by backing rightwing efforts to block the inauguration of the liberal president-elect, Bernardo Arévalo, on supposed electoral fraud grounds about a poll previously declared “free and fair” by international observers.

Arévalo subsequently took office, but not before Grenell lambasted American diplomats for “trying to intimidate conservatives” over “a phony concern about democracy”.

He has also repeatedly visited the Balkans – building on a previous role as the Trump administration’s special envoy to the region and working on property deals in Serbia and Albania with Trump’s son-in-law, Jared Kushner .

He attempted to broker a meeting between Trump and Turkey’s president, Recep Tayyip Erdoğan at last year’s United Nations general assembly in New York at a time when the Turkish leader was blocking Sweden’s bid to join Nato, although the proposal was subsequently rejected amid security concerns.

Grenell’s high profile has an intimidating effect on serving US diplomats, according to Fulton Armstrong, senior fellow at American University’s Centre for Latin American Studies.

“Grenell’s very cunning and effective. Having penetrated both the intelligence and the policy world, he knows who can be seduced, intimidated and destroyed,” Armstrong, a former senior analyst at the CIA, told the Guardian.

“The state department eventually did the right thing in Guatemala but only after a lot of dawdling and this tells Grenell that it has issues of commitment and allegiance [that he can exploit].

“Weak people at the state department are scared to piss off the right wing because they want to be ambassadors and fear for their careers, which makes them vulnerable. Someone like Grenell knows how this can be used for issues favoring Trump.”

For his part, Grenell has accused the state department of “playing politics” and “pushing leftwing ideas” in Latin America.

Addressing the influential CPAC gathering of conservatives in February, he said US foreign policy cried out for an “SOB diplomat”, a role he apparently envisions for himself.

“What we need right now is diplomacy with muscle,” Grenell told an online video debate last summer on the Balkans hosted by the pro-Trump America First Policy Institute. “We need to stop mocking tough diplomats. What we’ve seen with Ukraine is that when diplomats fail, we have war and conflict.”

Grenell has become a strident advocate of abandoning negotiations in decades-old territorial disputes in the Middle East and the Balkans in favor of trade and economic agreements that he hails as sidestepping political problems through creating jobs.

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“The success that Donald Trump had was that he avoided politics and concentrated on the economy,” he told CPAC. “Young people leave the region because they don’t have help and they don’t have a job. So part of our foreign policy, if we want to solve problems, is to avoid the political talk and figure out ways to do greater trade.”

For detractors, such talk is code for a transactional foreign policy tailored to Trump’s personal and business interests at the expense of America’s traditional democratic alliances – as well as a signal that Ukraine would be pressured to surrender territory to end its war with Russia.

“There are many aspects to what Grenell is doing,” said Joe Cirincione, a veteran Washington foreign policy and arms control specialist. “One is grift, looking for business deals, particularly in Serbia, where Trump has longstanding business interests and Trump seems to be helping him pursue this.

“Another is more sinister. It looks as though Grenell is trying to build up a developing authoritarian network of rightwing leaders to form this authoritarian axis that Trump might govern by – ranging from Putin to [Viktor] Orbán [prime minister of Hungary] to Erdoğan.

“All these are anti-democratic forces and use the simple playbook of using democracy to overthrow democracy.”

Grenell’s own pronouncements give proponents of America’s existing alliances little cause for comfort.

A relentless critic of Germany’s financial contributions to Nato, he trolled Sweden’s prime minister, Ulf Kristersson, when he attended Biden’s State of the Union address in January to mark his country’s accession to Nato, a move Grenell had opposed, purportedly on the grounds that it would not pay its way.

“The leader of Sweden, who currently isn’t paying his fair share of Nato obligations but has promised to do it later, is leaping to his feet to applaud Joe Biden and the far Left spending policies Biden wants to enact,” Grenell posted on X.

The comment echoed Grenell’s crockery-breaking spell as ambassador to Berlin, where he infuriated his hosts on arrival by demanding that they renew sanctions on Iran after Trump withdrew the US from the nuclear deal agreed by Barack Obama’s administration – even though Germany still adhered to the agreement.

He also ruffled German feathers by telling Breitbart that part of his ambassadorial role was “to empower other conservatives throughout Europe”, a comment seen by some as a tacit olive branch to the far-right Alternative for Germany (AFD) party.

For figures like Cirincione, such rhetoric is a harbinger of worse to come.

“If Trump were president and Grenell secretary of state, it would set back American interests by decades, collapse the development of the democratic west and assist the rise of the global right wing, no questions about it,” he said.

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Israel’s war on Gaza updates: Biden threatens policy change on Gaza

Biden to Netanyahu: US Gaza policy dependent on Israel’s ‘measurable’ steps on humanitarian disaster, aid worker safety.

The live page is now closed. You can continue to follow our coverage of the war in Gaza here .

• US President Joe Biden tells Israeli PM Benjamin Netanyahu that US Gaza policy is dependent on “measurable” steps Israel takes to address “civilian harm, humanitarian suffering and the safety of aid workers” in Gaza.
• Residents of northern Gaza have been forced to survive on an average of 245 calories a day since January, the international charity Oxfam says.
• The Israeli military halts leave for all combat units, calls up reservists, and blocks GPS coordinates in the country as Iran threatens retaliation for deadly strikes on its consulate in Damascus, Syria.
• World Central Kitchen (WCK) founder says that Israeli’s army “systematically” destroyed the three vehicles carrying seven WCK aid workers and demands that nations involved launch an independent investigation into the April 1 killings.
• At least 33,037 Palestinians have been killed and 75,668 wounded in Israeli attacks on Gaza since October 7. The death toll in Israel from Hamas’s October 7 attack stands at 1,139, with dozens still held captive.

That’s a wrap from us

Thank you for joining us for updates on everything related to Israel’s war on Gaza. This live page is now closed.

A look at what happened today

We will be closing this live page soon. Here’s a quick recap of today:

• In a tense phone call, US President Joe Biden has told Israeli PM Benjamin Netanyahu that US Gaza policy is dependent on “measurable” steps Israel takes to address “civilian harm, humanitarian suffering and the safety of aid workers” in the enclave.
• The armed wing of the Palestinian Islamic Jihad, the Quds Brigades, has fired rockets from Gaza towards Israeli cities, with Israeli media reporting two rockets were intercepted, while another hit a Sderot road.
• NGO Open Arms has said it and World Central Kitchen (WCK) are suspending attempts to get aid to Gaza via sea after seven WCK workers were killed in an Israeli air raid on Monday.
• At least four people, including a paramedic, have been killed in an Israeli air raid that hit a rescue team in northern Gaza’s Beit Hanoon, according to a health official.
• The amount of food available to people in the north of Gaza is less than 12 percent of the recommended daily 2,100 calorie intake needed per person, Oxfam has said.

1,000 children in Gaza lost one or both of their legs: PRCS

The Palestinian Red Cresent Society (PRCS) has published several posts on X in honour of Palestinian Child’s Day.

“1,000 children in Gaza lost one or both of their legs,” read one post.

“4 children are killed every hour in Gaza,” said another.

US looking at reports Israel used AI to identify bombing targets in Gaza

The United States is looking into a +972 Magazine and Local Call report that the Israeli military has been using artificial intelligence to help identify bombing targets in Gaza, White House national security spokesperson John Kirby told CNN in an interview on Thursday.

The Israeli military’s reported use of the untested and undisclosed artificial intelligence-powered database called the ‘Lavender’ system , has alarmed human rights and technology experts who said it could amount to “war crimes”.

US army gives update on aid airdrops

The US army’s Central Command (CENTCOM) says on X that, as usual, it used four of its C-130 planes to drop aid over north Gaza today.

It said that of the packages it dropped today, containing 50,680 meal equivalents, “approximately 20 bundles landed in the sea near the shoreline”.

Last week, at least 12 Palestinians died while attempting to retrieve aid packages that had dropped offshore. The US did not claim responsibility for those airdrops.

“USCENTCOM does not assess civilian harm or damage to infrastructure at this time but continues to monitor the situation,” the army said in its X post today.

North Gaza continues to draw nearer to full-scale famine, as Israel is repeatedly accused of blocking aid into the Gaza Strip. Earlier this week, an Israeli attack killed seven aid workers, leading several humanitarian organisations to scale back aid operations in Gaza, driving fears in north Gaza that food shortages there could get worse.

WATCH: Why I’m protesting against my Israeli government

Gil Dickmann’s aunt was killed on October 7 . His cousin is a captive. He’s leading the charge against Israel’s Gaza war.

Night after night, activist Gil Dickmann takes to a stage in Tel Aviv to rally his fellow Israelis in demanding their government change its approach to the war in Gaza. The 31-year-old believes a deal with Hamas is the only way to end the killing and bring Israeli captives back home.

For Dickmann, the situation is personal. On October 7, his aunt Kinneret Gat was killed in Be’eri, a kibbutz in southern Israel, and his cousin Carmel Gat is believed to be held captive in the Gaza Strip.

Watch Al Jazeera’s Close Up here:

More than 200 children held in Israeli jails, prisoners group says

There are currently more than 200 Palestinian children held in Israeli prisons, the Palestinian prisoner rights group Addameer says, including children from the occupied West Bank, East Jerusalem and the Gaza Strip.

Despite an uptick in arrests since October 7, the group said Israel has been “systematically arresting and abusing” Palestinian children for decades.

“Israel is the only state in the world that systematically prosecutes between 500 and 700 Palestinian children annually in military courts, lacking basic rights of fair trial,” it said, citing the group Defence for Children International – Palestine (DCIP).

According to Addameer, the period following October 7 is considered to be “the toughest and harshest” on prisoners in general, and particularly on children.

Freed Palestinian prisoners have reported physical and psychological abuse in Israeli jails. Many are denied adequate amounts of food and water and are also denied healthcare and medical attention, which has led to several deaths.

Thousands of detainees, including at least 41 children, are currently held under administrative detention, Addameer added, meaning they are being held indefinitely without charge or trial.

Vigil for the Polish aid worker killed in Gaza held in his home city

Mourners have gathered to commemorate Damian Sobol in his home city of Przemysl, Poland.

The 35-year-old was in Gaza with the World Central Kitchen (WCK) charity to provide aid to Palestinians when he was killed in an Israeli air strike along with six other WCK workers on Monday.

The mourners, numbering several hundred by PAP news agency, gathered near the Przemysl train station. They lit candles at the place where he had begun his relief work path when he volunteered to help Ukrainians fleeing their country in February 2022.

Polish authorities called for an international investigation into the killing as well as an apology from Israel and compensation for Sobol’s family.

News of Sobol’s death “was like a blow to the head”, said his fellow local aid worker Stefan Moskowicz, also speaking to TVN.

US says Rafah never came up in Biden-Netanyahu call

A US official has told Al Jazeera the issue of Israel’s planned offensive on Rafah did not come up during today’s phone call today between Biden and Netanyahu.

The comment came after a source said that the US president had “refused” to talk about the expected Rafah operation with the Israeli prime minister.

Israel denies evacuating embassies amid Iran threat

A spokesperson for the Israeli Foreign Ministry has, according to the Times of Israel, denied reports in local media that it is shuttering embassies around the globe in anticipation of threats of retaliation from Iran for an Israeli attack on its consulate in Syria earlier this week.

The Times of Israel also said it spoke to an Israeli diplomat stationed “abroad”, who denied knowledge of any plans for evacuation.

This news comes as the Israeli military says it’s strengthening its defences, increasing manpower and drafting reserve soldiers to operate air defences.

Israeli forces raid Hebron in occupied West Bank

Israeli forces have raided several neighbourhoods in Hebron, making a number of arrests, Palestinian news agency Wafa reports .

In Beit Ummar, a town located north of Hebron, at least three teenagers were mildly injured after Israeli forces assaulted them, according to Wafa.

It said Israeli soldiers had stormed the town earlier today. They reportedly raided several homes and fired live bullets as well as tear gas.

Israel gives update on aid entry to Gaza

Israel’s Coordination of Government Activities in the Territories (COGAT) office says 240 aid trucks entered the Gaza Strip today.

Israel has been repeatedly criticised for blocking the entry of aid to Gaza, with several NGOs and rights organisations accusing it of deliberately blocking aid while warnings of famine in the besieged enclave rise.

The update also comes days after an Israeli attack killed seven aid staff working with the World Central Kitchen (WCK) food charity. The incident has led various humanitarian aid organisations, including WCK, to temporarily suspend operations in Gaza in order to assess the security situation.

Photos: The struggle to receive aid in Gaza

Jordanians again flood the streets of capital in support of Palestinians

Video verified by Al Jazeera shows mass demonstrations on the streets of Jordan’s capital for the 12th day in a row.

As always, the protesters marched to the Israeli embassy, demanding a ceasefire in Gaza, with some demanding a cancellation of Jordan’s peace treaty with Israel.

Watch our video on protests that occurred in Amman late last month:

Israel is ‘losing the PR war’: Trump

In an interview with radio host Hugh Hewitt, former US President Donald Trump says Israel is receiving bad press and creating negative public sentiment because of its social media strategy, which includes posting images of destruction in the Gaza Strip.

“They’re releasing the most heinous, most horrible tapes of buildings falling down. And people are imagining there’s a lot of people in those buildings, or people in those buildings, and they don’t like it,” said Trump, who is a candidate in November’s presidential election.

“I don’t know why they released wartime shots like that. I guess it makes them look tough. But to me, it doesn’t make them look tough,” Trump added.

“They’re losing the PR war. They’re losing it big. But they’ve got to finish what they started, and they’ve got to finish it fast, and we have to get on with life.”

Quds Brigades claims rocket attack on southern Israel

The armed wing of the Palestinian Islamic Jihad says it has fired rockets from the Gaza Strip towards Israeli cities.

On Telegram, the group said that it “bombed ‘Ashkelon’, ‘Sderot’, ‘Niram’, and the settlements surrounding the Gaza Strip in response to the crimes of the Zionist enemy against our people”.

In an apparent confirmation of this claim, local media reported the Israeli army as saying two rockets were intercepted in southern Israel while another rocket hit a Sderot road, causing “minor damage”.

Air raid sirens sounded in Ashkelon and surrounding areas, the reports added.

Spanish NGO working with WCK stops using sea route to Gaza

NGO Open Arms said it and US charity World Central Kitchen (WCK) are suspending attempts to get aid to Gaza via sea after seven WCK workers were killed in an Israeli air raid on Monday.

The two charities had worked together in launching a maritime corridor of humanitarian aid to Gaza from Cyprus in March and had just completed unloading about a third of the shipped cargo when the convoy of WCK workers was attacked on April 1.

“This attack, perpetrated by the [Israeli military] last Monday, marks a painful turning point in our efforts to alleviate the humanitarian crisis in Gaza,” Open Arms said in a written statement.

“With the arrival yesterday of the Open Arms ship in Larnaca, Cyprus, the mission in alliance with WCK in the humanitarian corridor to the Gaza Strip is suspended,” Open Arms said.

It quoted Open Arms director Oscar Camps calling Gaza a “dystopian laboratory where people’s blood flows while war technologies are tested and perfected, directed by increasingly automated algorithms that allow all human responsibility to be diluted, using technology and trivializing evil.”

“Now states are rushing to extend their condolences to the families, but they are not showing the same rush to stop the shipment of weapons to this laboratory of destruction,” Camps said.

“How much more humanity must be lost in this genocide?”

WATCH: Famine stalks Gaza as aid deliveries now in question

Israel’s killing of seven World Central Kitchen workers in Deir el-Balah earlier this week has led many humanitarian organisations to express reluctance to continue operating inside the Gaza Strip for fear of repeat incidents.

This has driven fears among Palestinians that food shortages, which already have Gaza’s population on the brink of starvation, will get worse.

Watch our video to find out more:

US support for Israel’s defence ‘ironclad’ despite ‘frustration’: White House

US President Joe Biden’s tougher tone in a call with Prime Minister Benjamin Netanyahu over Israel’s war on Gaza reflected mounting “frustration” that Israel is not heeding demands to protect civilians, the White House has said.

“Yes, there’s been growing frustration,” National Security Council spokesperson John Kirby told reporters when asked whether the call reflected Biden’s frustration.

However, he added that the US’ support for “Israel’s self-defence remains ironclad”.

“They face a range of threats, and the United States isn’t going to walk away,” he said.

Biden refuses to speak with Netanyahu about Rafah invasion: Al Jazeera source

A source with knowledge of the phone call that took place a short while ago between Biden and Netanyahu has told Al Jazeera the following:

• Biden refused to talk about any details related to a possible Israeli military operation in Rafah.
• Biden urged Netanyahu to take immediate, even unilateral, action to stop civilian suffering in Gaza.
• Biden requested specific changes from Netanyahu, including increasing aid access, expanding the powers of the Israeli negotiating team to reach a ceasefire and stopping any Israeli arrangements regarding a future presence in Gaza.
• Biden told Netanyahu that the world had turned against Israel and Washington’s allies had informed it of a shift in their policy.
• Biden informed Netanyahu that he would temporarily suspend deliberations on a future arms deal with Israel in Congress.
• Biden requested a detailed report from Netanyahu on the killing of aid workers and called for an immediate investigation that includes comprehensive accountability.
• Biden said he would send his national security adviser to Israel to follow up on steps to change Israel’s policy.

Biden-Netanyahu call ‘will have implications’

Mahjoob Zweiri, director of the Gulf Studies Center at Qatar University, says there is nothing that so far indicates what Netanyahu’s response was to his call with Biden.

Netanyahu usually takes to social media or holds a press conference and “reflects on what happened in the phone call” because it’s his way to say he’s “challenging what has been talked about”, Zweiri said.

Biden is especially “frustrated and very upset” because he is reportedly a close friend to celebrity chef and founder of the World Central Kitchen (WCK) charity Jose Andres, Zweiri said.

An Israeli attack that killed seven WCK aid workers in Gaza this week “puts more pressure on Biden”, he added.

“I would argue that this phone call will have implications,” Zweiri said.

White House urges Israel aid action within ‘coming hours and days’

The White House says Israel must allow a “dramatic” increase of aid into Gaza within “hours or days,” after US President Joe Biden warned Israeli Prime Minister Benjamin Netanyahu that major changes are needed in the way the war is conducted.

“What we are looking to see and hope to see here in the coming hours and days is a dramatic increase in the humanitarian assistance getting in, additional crossings opened up, and a reduction in the violence against civilians and certainly aid workers,” US National Security Council spokesperson John Kirby told reporters.

A tense phone call between Biden and Netanyahu

Reporting from Washington DC, US

This is a very strongly worded readout [from the Biden-Netanyahu call], much stronger than we typically see from the White House.

This is the strongest language we’ve seen publicly. We’ve never had a window into some of these private conversations. We know that there has been a lot of frustration on the part of the US president, and we have heard leaks that the president has had some very frank discussions.

Biden made clear the need for Israel to announce a series of specific, concrete and measurable steps to address civilian harm, humanitarian suffering and the safety of aid workers.

And he made clear that the US policy with respect to Gaza will be determined by the assessment of Israel’s immediate action on these steps.

In other words, despite all the steps that Israel has taken to allow aid into Gaza, what the United States feels is that the results on the ground are unacceptable.

The feeling by the United States is that 100 percent of the population [in Gaza] is in need of assistance and that even as aid workers are trying to help and get that assistance, their lives are in peril.

UN says nighttime ‘aid movements’ have resumed in Gaza

UN Spokesperson Stephane Dujarric says that “aid movements resumed tonight” after a 48-hour pause in nighttime movements.

The United Nations had suspended movements at night in Gaza to evaluate security concerns following the killing of seven workers from the World Central Kitchen food charity.

The UN’s World Food Programme continued operations during the day, including daily efforts to send convoys to the north of Gaza, where famine is imminent, he said.

Dujarric also said teams with the World Health Organization (WHO) managed to speak to patients who were able to flee al-Shifa Hospital. The medical complex in Gaza City was raided by Israeli forces, who also besieged and heavily destroyed parts of it, before withdrawing earlier this week.

Survivors described “dark conditions during the siege, with no food, water or medicine available”, Dujarric said.

Patients and doctors resorted to “putting salt and vinegar in people’s wounds in place of antiseptics, which are nonexistent,” he said.

Blinken calls on Israel to protect civilians in Gaza

US Secretary of State Antony Blinken has called on Israel, as a democracy, to place the highest value on human life and increase the flow of aid to Gaza, adding that this week’s “horrific attack” on World Central Kitchen workers in Gaza must be the last such incident.

“Right now, there is no higher priority in Gaza than protecting civilians, surging humanitarian assistance and ensuring the security of those who provide it. Israel must meet this moment,” Blinken told reporters at a news conference in Brussels.