Discharge of account debtor--notification ofassignment--identification and proof of assignment--restrictionson assignment of accounts, chattel paper, payment intangibles andpromissory notes ineffective.
400.9-406. (a) Subject to subsections (b) through (i), an accountdebtor on an account, chattel paper, or a payment intangible may dischargeits obligation by paying the assignor until, but not after, the accountdebtor receives a notification, authenticated by the assignor or theassignee, that the amount due or to become due has been assigned and thatpayment is to be made to the assignee. After receipt of the notification,the account debtor may discharge its obligation by paying the assignee andmay not discharge the obligation by paying the assignor.
(b) Subject to subsection (h), notification is ineffective undersubsection (a):
(1) If it does not reasonably identify the rights assigned;
(2) To the extent that an agreement between an account debtor and aseller of a payment intangible limits the account debtor's duty to pay aperson other than the seller and the limitation is effective under lawother than this article; or
(3) At the option of an account debtor, if the notification notifiesthe account debtor to make less than the full amount of any installment orother periodic payment to the assignee, even if:
(A) Only a portion of the account, chattel paper, or generalintangible has been assigned to that assignee;
(B) A portion has been assigned to another assignee; or
(C) The account debtor knows that the assignment to that assignee islimited.
(c) Subject to subsection (h), if requested by the account debtor, anassignee shall seasonably furnish reasonable proof that the assignment hasbeen made. Unless the assignee complies, the account debtor may dischargeits obligation by paying the assignor, even if the account debtor hasreceived a notification under subsection (a).
(d) Except as otherwise provided in subsection (e) and sections400.2A-303 and 400.9-407, and subject to subsection (h), a term in anagreement between an account debtor and an assignor or in a promissory noteis ineffective to the extent that it:
(1) Prohibits, restricts, or requires the consent of the accountdebtor or person obligated on the promissory note to the assignment ortransfer of, or the creation, attachment, perfection, or enforcement of asecurity interest in, the account, chattel paper, payment intangible, orpromissory note; or
(2) Provides that the assignment or transfer or the creation,attachment, perfection, or enforcement of the security interest may giverise to a default, breach, right of recoupment, claim, defense,termination, right of termination, or remedy under the account, chattelpaper, payment intangible, or promissory note.
(e) Subsection (d) does not apply to the sale of a payment intangibleor promissory note.
(f) Except as otherwise provided in sections 400.2A-303 and400.9-407, and subject to subsections (h) and (i), a rule of law, statute,or regulation, that prohibits, restricts, or requires the consent of agovernment, governmental body or official, or account debtor to theassignment or transfer of, or creation of a security interest in, anaccount or chattel paper is ineffective to the extent that the rule of law,statute, or regulation:
(1) Prohibits, restricts, or requires the consent of the government,governmental body or official, or account debtor to the assignment ortransfer of, or the creation, attachment, perfection, or enforcement of asecurity interest in, the account or chattel paper; or
(2) Provides that the assignment or transfer or the creation,attachment, perfection, or enforcement of the security interest may giverise to a default, breach, right of recoupment, claim, defense,termination, right of termination, or remedy under the account or chattelpaper.
(g) Subject to subsection (h), an account debtor may not waive orvary its option under subsection (b)(3).
(h) This section is subject to law other than this article whichestablishes a different rule for an account debtor who is an individual andwho incurred the obligation primarily for personal, family, or householdpurposes.
(i) This section does not apply to an assignment of ahealth-care-insurance receivable.
(j) This section prevails over any inconsistent provisions of anystatutes, rules, and regulations.
Discharge of account debtor--notification ofassignment--identification and proof of assignment--restrictionson assignment of accounts, chattel paper, payment intangibles andpromissory notes ineffective.
400.9-406. (a) Subject to subsections (b) through (i), an accountdebtor on an account, chattel paper, or a payment intangible may dischargeits obligation by paying the assignor until, but not after, the accountdebtor receives a notification, authenticated by the assignor or theassignee, that the amount due or to become due has been assigned and thatpayment is to be made to the assignee. After receipt of the notification,the account debtor may discharge its obligation by paying the assignee andmay not discharge the obligation by paying the assignor.
(b) Subject to subsection (h), notification is ineffective undersubsection (a):
(1) If it does not reasonably identify the rights assigned;
(2) To the extent that an agreement between an account debtor and aseller of a payment intangible limits the account debtor's duty to pay aperson other than the seller and the limitation is effective under lawother than this article; or
(3) At the option of an account debtor, if the notification notifiesthe account debtor to make less than the full amount of any installment orother periodic payment to the assignee, even if:
(A) Only a portion of the account, chattel paper, or generalintangible has been assigned to that assignee;
(B) A portion has been assigned to another assignee; or
(C) The account debtor knows that the assignment to that assignee islimited.
(c) Subject to subsection (h), if requested by the account debtor, anassignee shall seasonably furnish reasonable proof that the assignment hasbeen made. Unless the assignee complies, the account debtor may dischargeits obligation by paying the assignor, even if the account debtor hasreceived a notification under subsection (a).
(d) Except as otherwise provided in subsection (e) and sections400.2A-303 and 400.9-407, and subject to subsection (h), a term in anagreement between an account debtor and an assignor or in a promissory noteis ineffective to the extent that it:
(1) Prohibits, restricts, or requires the consent of the accountdebtor or person obligated on the promissory note to the assignment ortransfer of, or the creation, attachment, perfection, or enforcement of asecurity interest in, the account, chattel paper, payment intangible, orpromissory note; or
(2) Provides that the assignment or transfer or the creation,attachment, perfection, or enforcement of the security interest may giverise to a default, breach, right of recoupment, claim, defense,termination, right of termination, or remedy under the account, chattelpaper, payment intangible, or promissory note.
(e) Subsection (d) does not apply to the sale of a payment intangibleor promissory note.
(f) Except as otherwise provided in sections 400.2A-303 and400.9-407, and subject to subsections (h) and (i), a rule of law, statute,or regulation, that prohibits, restricts, or requires the consent of agovernment, governmental body or official, or account debtor to theassignment or transfer of, or creation of a security interest in, anaccount or chattel paper is ineffective to the extent that the rule of law,statute, or regulation:
(1) Prohibits, restricts, or requires the consent of the government,governmental body or official, or account debtor to the assignment ortransfer of, or the creation, attachment, perfection, or enforcement of asecurity interest in, the account or chattel paper; or
(2) Provides that the assignment or transfer or the creation,attachment, perfection, or enforcement of the security interest may giverise to a default, breach, right of recoupment, claim, defense,termination, right of termination, or remedy under the account or chattelpaper.
(g) Subject to subsection (h), an account debtor may not waive orvary its option under subsection (b)(3).
(h) This section is subject to law other than this article whichestablishes a different rule for an account debtor who is an individual andwho incurred the obligation primarily for personal, family, or householdpurposes.
(i) This section does not apply to an assignment of ahealth-care-insurance receivable.
(j) This section prevails over any inconsistent provisions of anystatutes, rules, and regulations.
Discharge of account debtor--notification ofassignment--identification and proof of assignment--restrictionson assignment of accounts, chattel paper, payment intangibles andpromissory notes ineffective.
400.9-406. (a) Subject to subsections (b) through (i), an accountdebtor on an account, chattel paper, or a payment intangible may dischargeits obligation by paying the assignor until, but not after, the accountdebtor receives a notification, authenticated by the assignor or theassignee, that the amount due or to become due has been assigned and thatpayment is to be made to the assignee. After receipt of the notification,the account debtor may discharge its obligation by paying the assignee andmay not discharge the obligation by paying the assignor.
(b) Subject to subsection (h), notification is ineffective undersubsection (a):
(1) If it does not reasonably identify the rights assigned;
(2) To the extent that an agreement between an account debtor and aseller of a payment intangible limits the account debtor's duty to pay aperson other than the seller and the limitation is effective under lawother than this article; or
(3) At the option of an account debtor, if the notification notifiesthe account debtor to make less than the full amount of any installment orother periodic payment to the assignee, even if:
(A) Only a portion of the account, chattel paper, or generalintangible has been assigned to that assignee;
(B) A portion has been assigned to another assignee; or
(C) The account debtor knows that the assignment to that assignee islimited.
(c) Subject to subsection (h), if requested by the account debtor, anassignee shall seasonably furnish reasonable proof that the assignment hasbeen made. Unless the assignee complies, the account debtor may dischargeits obligation by paying the assignor, even if the account debtor hasreceived a notification under subsection (a).
(d) Except as otherwise provided in subsection (e) and sections400.2A-303 and 400.9-407, and subject to subsection (h), a term in anagreement between an account debtor and an assignor or in a promissory noteis ineffective to the extent that it:
(1) Prohibits, restricts, or requires the consent of the accountdebtor or person obligated on the promissory note to the assignment ortransfer of, or the creation, attachment, perfection, or enforcement of asecurity interest in, the account, chattel paper, payment intangible, orpromissory note; or
(2) Provides that the assignment or transfer or the creation,attachment, perfection, or enforcement of the security interest may giverise to a default, breach, right of recoupment, claim, defense,termination, right of termination, or remedy under the account, chattelpaper, payment intangible, or promissory note.
(e) Subsection (d) does not apply to the sale of a payment intangibleor promissory note.
(f) Except as otherwise provided in sections 400.2A-303 and400.9-407, and subject to subsections (h) and (i), a rule of law, statute,or regulation, that prohibits, restricts, or requires the consent of agovernment, governmental body or official, or account debtor to theassignment or transfer of, or creation of a security interest in, anaccount or chattel paper is ineffective to the extent that the rule of law,statute, or regulation:
(1) Prohibits, restricts, or requires the consent of the government,governmental body or official, or account debtor to the assignment ortransfer of, or the creation, attachment, perfection, or enforcement of asecurity interest in, the account or chattel paper; or
(2) Provides that the assignment or transfer or the creation,attachment, perfection, or enforcement of the security interest may giverise to a default, breach, right of recoupment, claim, defense,termination, right of termination, or remedy under the account or chattelpaper.
(g) Subject to subsection (h), an account debtor may not waive orvary its option under subsection (b)(3).
(h) This section is subject to law other than this article whichestablishes a different rule for an account debtor who is an individual andwho incurred the obligation primarily for personal, family, or householdpurposes.
(i) This section does not apply to an assignment of ahealth-care-insurance receivable.
(j) This section prevails over any inconsistent provisions of anystatutes, rules, and regulations.
