Article 3.--REGULATION OF AGREEMENTS AND PRACTICES
16a-3-404.(UCCC) Assignee subject to defenses; application of payments
received by assignee; limitation of actions; assignee may require seller
or lessor to repurchase obligation; joinder of parties; procedure.
(1) An assignee of the rights of the seller or lessor under a consumer
credit sale or consumer lease is subject to all claims and defenses of the buyer
or lessee against the seller or lessor arising out of the sale or lease,
notwithstanding that:
(a) There is an agreement to the contrary, or
(b) the assignee is a holder in due course of a negotiable
instrument issued in violation of the provisions prohibiting certain
negotiable instruments (section 16a-3-307).
(2) Claims or defenses of a buyer or lessee specified in subsection
(1) may be asserted against the assignee only:
(a) If the buyer or lessee has attempted in good faith to obtain
reasonable satisfaction from the seller or lessor with respect to claims
or defenses,
(b) if the buyer or lessee, when requested in writing to do so by
the seller, lessor or the assignee, has given notice in writing to the
seller or lessee and the assignee stating the claims or defenses,
(c) to the extent of the amount owing to the assignee with respect
to the sale or lease at the time the assignee has notice of such claims
or defenses. Such notice, generally stating the claims or defenses,
must be in writing and shall be sent to the seller (or lessor), and to
the assignee if the buyer or lessee has received written notice of the
name and address of the assignee, and
(d) as a matter of defense to or setoff against claims by the
assignee except that the buyer or lessee shall not be prohibited from
bringing an action to rescind an obligation against which it has a
defense or setoff.
(3) For the purpose of determining the amount owing to the assignee
with respect to the sale or lease:
(a) Payments received by the assignee after the consolidation of two
or more consumer credit sales, other than pursuant to open end credit,
are deemed to have been first applied to the payment of the sales first
made; if the sales consolidated arose from sales made on the same day,
payments are deemed to have been first applied to the smaller or
smallest sale or sales;
(b) payments received upon an open end credit account are deemed to
have been first applied to the payment of finance charges in the order
of their entry to the account and then to the payment of debts in the
order in which the entries of the debts are made to the account.
(4) Any action by an assignee or the original seller or lessor who
has repurchased an obligation under subsection (5) to enforce an
obligation, or any action by a buyer or lessee to rescind, or any
request to repurchase the obligation, shall be brought within one year
from the date of receipt of the notice of the claim or defense, or
default in payment, whichever is later.
(5) If a claim or defense of a buyer or lessee against a seller or
lessor is asserted against an assignee, the assignee may, regardless of
any existing agreement to the contrary, require the seller or lessor to
repurchase the obligation for an amount equal to the price for which the
obligation was assigned, plus that portion of the finance charge earned
by the assignee, minus payments previously made to the assignee by the
buyer or lessee. In any action by the buyer or lessee to rescind an
obligation held by the assignee, the seller or lessor shall have the
right to intervene and any party may join as a defendant any
manufacturer or other person who is or may be liable to another party.
If the action to rescind is brought against the seller or lessor, such
seller or lessor shall have the right to join as a defendant any
manufacturer or other person who is or may be liable to such seller or
lessor.
(6) An agreement may not provide greater rights for an assignee than
this section permits.
History: L. 1973, ch. 85, § 59; L. 1975, ch. 127, § 1; L.
1976, ch. 145, § 40; L. 1981, ch. 93, § 13; July 1.
Article 3.--REGULATION OF AGREEMENTS AND PRACTICES
16a-3-404.(UCCC) Assignee subject to defenses; application of payments
received by assignee; limitation of actions; assignee may require seller
or lessor to repurchase obligation; joinder of parties; procedure.
(1) An assignee of the rights of the seller or lessor under a consumer
credit sale or consumer lease is subject to all claims and defenses of the buyer
or lessee against the seller or lessor arising out of the sale or lease,
notwithstanding that:
(a) There is an agreement to the contrary, or
(b) the assignee is a holder in due course of a negotiable
instrument issued in violation of the provisions prohibiting certain
negotiable instruments (section 16a-3-307).
(2) Claims or defenses of a buyer or lessee specified in subsection
(1) may be asserted against the assignee only:
(a) If the buyer or lessee has attempted in good faith to obtain
reasonable satisfaction from the seller or lessor with respect to claims
or defenses,
(b) if the buyer or lessee, when requested in writing to do so by
the seller, lessor or the assignee, has given notice in writing to the
seller or lessee and the assignee stating the claims or defenses,
(c) to the extent of the amount owing to the assignee with respect
to the sale or lease at the time the assignee has notice of such claims
or defenses. Such notice, generally stating the claims or defenses,
must be in writing and shall be sent to the seller (or lessor), and to
the assignee if the buyer or lessee has received written notice of the
name and address of the assignee, and
(d) as a matter of defense to or setoff against claims by the
assignee except that the buyer or lessee shall not be prohibited from
bringing an action to rescind an obligation against which it has a
defense or setoff.
(3) For the purpose of determining the amount owing to the assignee
with respect to the sale or lease:
(a) Payments received by the assignee after the consolidation of two
or more consumer credit sales, other than pursuant to open end credit,
are deemed to have been first applied to the payment of the sales first
made; if the sales consolidated arose from sales made on the same day,
payments are deemed to have been first applied to the smaller or
smallest sale or sales;
(b) payments received upon an open end credit account are deemed to
have been first applied to the payment of finance charges in the order
of their entry to the account and then to the payment of debts in the
order in which the entries of the debts are made to the account.
(4) Any action by an assignee or the original seller or lessor who
has repurchased an obligation under subsection (5) to enforce an
obligation, or any action by a buyer or lessee to rescind, or any
request to repurchase the obligation, shall be brought within one year
from the date of receipt of the notice of the claim or defense, or
default in payment, whichever is later.
(5) If a claim or defense of a buyer or lessee against a seller or
lessor is asserted against an assignee, the assignee may, regardless of
any existing agreement to the contrary, require the seller or lessor to
repurchase the obligation for an amount equal to the price for which the
obligation was assigned, plus that portion of the finance charge earned
by the assignee, minus payments previously made to the assignee by the
buyer or lessee. In any action by the buyer or lessee to rescind an
obligation held by the assignee, the seller or lessor shall have the
right to intervene and any party may join as a defendant any
manufacturer or other person who is or may be liable to another party.
If the action to rescind is brought against the seller or lessor, such
seller or lessor shall have the right to join as a defendant any
manufacturer or other person who is or may be liable to such seller or
lessor.
(6) An agreement may not provide greater rights for an assignee than
this section permits.
History: L. 1973, ch. 85, § 59; L. 1975, ch. 127, § 1; L.
1976, ch. 145, § 40; L. 1981, ch. 93, § 13; July 1.
Article 3.--REGULATION OF AGREEMENTS AND PRACTICES
16a-3-404.(UCCC) Assignee subject to defenses; application of payments
received by assignee; limitation of actions; assignee may require seller
or lessor to repurchase obligation; joinder of parties; procedure.
(1) An assignee of the rights of the seller or lessor under a consumer
credit sale or consumer lease is subject to all claims and defenses of the buyer
or lessee against the seller or lessor arising out of the sale or lease,
notwithstanding that:
(a) There is an agreement to the contrary, or
(b) the assignee is a holder in due course of a negotiable
instrument issued in violation of the provisions prohibiting certain
negotiable instruments (section 16a-3-307).
(2) Claims or defenses of a buyer or lessee specified in subsection
(1) may be asserted against the assignee only:
(a) If the buyer or lessee has attempted in good faith to obtain
reasonable satisfaction from the seller or lessor with respect to claims
or defenses,
(b) if the buyer or lessee, when requested in writing to do so by
the seller, lessor or the assignee, has given notice in writing to the
seller or lessee and the assignee stating the claims or defenses,
(c) to the extent of the amount owing to the assignee with respect
to the sale or lease at the time the assignee has notice of such claims
or defenses. Such notice, generally stating the claims or defenses,
must be in writing and shall be sent to the seller (or lessor), and to
the assignee if the buyer or lessee has received written notice of the
name and address of the assignee, and
(d) as a matter of defense to or setoff against claims by the
assignee except that the buyer or lessee shall not be prohibited from
bringing an action to rescind an obligation against which it has a
defense or setoff.
(3) For the purpose of determining the amount owing to the assignee
with respect to the sale or lease:
(a) Payments received by the assignee after the consolidation of two
or more consumer credit sales, other than pursuant to open end credit,
are deemed to have been first applied to the payment of the sales first
made; if the sales consolidated arose from sales made on the same day,
payments are deemed to have been first applied to the smaller or
smallest sale or sales;
(b) payments received upon an open end credit account are deemed to
have been first applied to the payment of finance charges in the order
of their entry to the account and then to the payment of debts in the
order in which the entries of the debts are made to the account.
(4) Any action by an assignee or the original seller or lessor who
has repurchased an obligation under subsection (5) to enforce an
obligation, or any action by a buyer or lessee to rescind, or any
request to repurchase the obligation, shall be brought within one year
from the date of receipt of the notice of the claim or defense, or
default in payment, whichever is later.
(5) If a claim or defense of a buyer or lessee against a seller or
lessor is asserted against an assignee, the assignee may, regardless of
any existing agreement to the contrary, require the seller or lessor to
repurchase the obligation for an amount equal to the price for which the
obligation was assigned, plus that portion of the finance charge earned
by the assignee, minus payments previously made to the assignee by the
buyer or lessee. In any action by the buyer or lessee to rescind an
obligation held by the assignee, the seller or lessor shall have the
right to intervene and any party may join as a defendant any
manufacturer or other person who is or may be liable to another party.
If the action to rescind is brought against the seller or lessor, such
seller or lessor shall have the right to join as a defendant any
manufacturer or other person who is or may be liable to such seller or
lessor.
(6) An agreement may not provide greater rights for an assignee than
this section permits.
History: L. 1973, ch. 85, § 59; L. 1975, ch. 127, § 1; L.
1976, ch. 145, § 40; L. 1981, ch. 93, § 13; July 1.