Conflict Between Subrogation And Assignment In Commercial Supply Transactions

In commercial supply agreements/contracts, sometimes supplier of goods prefers to take insurance in order to avoid the risk of payment by the buyer. Such commercial agreements generally put restriction on assignment of rights and/or transfer of any interest or right under the agreement by any party without the prior written consent of the other party. In this regard, it is important to understand that whether such restriction on assignment or transfer of any interest/right in the agreement would apply in case supplier of goods transfers its right in favor of insurance company by executing letter of subrogation, which is generally required by the insurance company at the time of processing the claim of insured. To find answer to this query, we have analyzed the concept of these legal terminologies and the interpretations of the courts on the same.