§ 6A-9-406 Discharge of account debtor;notification of assignment; identification and proof of assignment;restrictions on assignment of accounts, chattel paper, payment intangibles, andpromissory notes ineffective. – (a) Discharge of account debtor; effect of notification. Subject tosubsections (b) through (i), an account debtor on an account, chattel paper, ora payment intangible may discharge its obligation by paying the assignor until,but not after, the account debtor receives a notification, authenticated by theassignor or the assignee, that the amount due or to become due has beenassigned and that payment is to be made to the assignee. After receipt of thenotification, the account debtor may discharge its obligation by paying theassignee and may not discharge the obligation by paying the assignor.
(b) When notification ineffective. Subject tosubsection (h), notification is ineffective under subsection (a):
(1) If it does not reasonably identify the rights assigned;
(2) To the extent that an agreement between an account debtorand a seller of a payment intangible limits the account debtor's duty to pay aperson other than the seller and the limitation is effective under law otherthan this chapter; or
(3) At the option of an account debtor, if the notificationnotifies the account debtor to make less than the full amount of anyinstallment or other periodic payment to the assignee, even if:
(i) Only a portion of the account, chattel paper, or paymentintangible has been assigned to that assignee;
(ii) A portion has been assigned to another assignee; or
(iii) The account debtor knows that the assignment to thatassignee is limited.
(c) Proof of assignment. Subject to subsection (h), ifrequested by the account debtor, an assignee shall seasonably furnishreasonable proof that the assignment has been made. Unless the assigneecomplies, the account debtor may discharge its obligation by paying theassignor, even if the account debtor has received a notification undersubsection (a).
(d) Term restricting assignment generally ineffective.Except as otherwise provided in subsection (e) and § 6A-2.1-303 and §6A-9-407, and subject to subsection (h), a term in an agreement between anaccount debtor and an assignor or in a promissory note is ineffective to theextent that it:
(1) Prohibits, restricts, or requires the consent of theaccount debtor 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 give riseto a default, breach, right of recoupment, claim, defense, termination, rightof termination, or remedy under the account, chattel paper, payment intangible,or promissory note.
(e) Inapplicability of subsection (d) to certainsales. Subsection (d) does not apply to the sale of a payment intangible orpromissory note.
(f) Legal restrictions on assignment generallyineffective. Except as otherwise provided in §§ 6A-2.1-303 and6A-9-407 and subject to subsections (h) and (i), a rule of law, statute, orregulation that prohibits, restricts, or requires the consent of a government,governmental body or official, or account debtor to the assignment or transferof, or creation of a security interest in, an account or chattel paper isineffective to the extent that the rule of law, statute, or regulation:
(1) Prohibits, restricts, or requires the consent of thegovernment, governmental body or official, or account debtor to the assignmentor transfer 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 give riseto a default, breach, right of recoupment, claim, defense, termination, rightof termination, or remedy under the account or chattel paper.
(g) Subsection (b)(3) not waivable. Subject tosubsection (h), an account debtor may not waive or vary its option undersubsection (b)(3).
(h) Rule for individual under other law. This sectionis subject to law other than this chapter which establishes a different rulefor an account debtor who is an individual and who incurred the obligationprimarily for personal, family, or household purposes.
(i) Inapplicability to health-care-insurancereceivable. This section does not apply to an assignment of ahealth-care-insurance receivable.
(j) Section prevails over inconsistent law. Thissection prevails over any statutes, rules, and regulations inconsistent withthis section.
§ 6A-9-406 Discharge of account debtor;notification of assignment; identification and proof of assignment;restrictions on assignment of accounts, chattel paper, payment intangibles, andpromissory notes ineffective. – (a) Discharge of account debtor; effect of notification. Subject tosubsections (b) through (i), an account debtor on an account, chattel paper, ora payment intangible may discharge its obligation by paying the assignor until,but not after, the account debtor receives a notification, authenticated by theassignor or the assignee, that the amount due or to become due has beenassigned and that payment is to be made to the assignee. After receipt of thenotification, the account debtor may discharge its obligation by paying theassignee and may not discharge the obligation by paying the assignor.
(b) When notification ineffective. Subject tosubsection (h), notification is ineffective under subsection (a):
(1) If it does not reasonably identify the rights assigned;
(2) To the extent that an agreement between an account debtorand a seller of a payment intangible limits the account debtor's duty to pay aperson other than the seller and the limitation is effective under law otherthan this chapter; or
(3) At the option of an account debtor, if the notificationnotifies the account debtor to make less than the full amount of anyinstallment or other periodic payment to the assignee, even if:
(i) Only a portion of the account, chattel paper, or paymentintangible has been assigned to that assignee;
(ii) A portion has been assigned to another assignee; or
(iii) The account debtor knows that the assignment to thatassignee is limited.
(c) Proof of assignment. Subject to subsection (h), ifrequested by the account debtor, an assignee shall seasonably furnishreasonable proof that the assignment has been made. Unless the assigneecomplies, the account debtor may discharge its obligation by paying theassignor, even if the account debtor has received a notification undersubsection (a).
(d) Term restricting assignment generally ineffective.Except as otherwise provided in subsection (e) and § 6A-2.1-303 and §6A-9-407, and subject to subsection (h), a term in an agreement between anaccount debtor and an assignor or in a promissory note is ineffective to theextent that it:
(1) Prohibits, restricts, or requires the consent of theaccount debtor 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 give riseto a default, breach, right of recoupment, claim, defense, termination, rightof termination, or remedy under the account, chattel paper, payment intangible,or promissory note.
(e) Inapplicability of subsection (d) to certainsales. Subsection (d) does not apply to the sale of a payment intangible orpromissory note.
(f) Legal restrictions on assignment generallyineffective. Except as otherwise provided in §§ 6A-2.1-303 and6A-9-407 and subject to subsections (h) and (i), a rule of law, statute, orregulation that prohibits, restricts, or requires the consent of a government,governmental body or official, or account debtor to the assignment or transferof, or creation of a security interest in, an account or chattel paper isineffective to the extent that the rule of law, statute, or regulation:
(1) Prohibits, restricts, or requires the consent of thegovernment, governmental body or official, or account debtor to the assignmentor transfer 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 give riseto a default, breach, right of recoupment, claim, defense, termination, rightof termination, or remedy under the account or chattel paper.
(g) Subsection (b)(3) not waivable. Subject tosubsection (h), an account debtor may not waive or vary its option undersubsection (b)(3).
(h) Rule for individual under other law. This sectionis subject to law other than this chapter which establishes a different rulefor an account debtor who is an individual and who incurred the obligationprimarily for personal, family, or household purposes.
(i) Inapplicability to health-care-insurancereceivable. This section does not apply to an assignment of ahealth-care-insurance receivable.
(j) Section prevails over inconsistent law. Thissection prevails over any statutes, rules, and regulations inconsistent withthis section.
§ 6A-9-406 Discharge of account debtor;notification of assignment; identification and proof of assignment;restrictions on assignment of accounts, chattel paper, payment intangibles, andpromissory notes ineffective. – (a) Discharge of account debtor; effect of notification. Subject tosubsections (b) through (i), an account debtor on an account, chattel paper, ora payment intangible may discharge its obligation by paying the assignor until,but not after, the account debtor receives a notification, authenticated by theassignor or the assignee, that the amount due or to become due has beenassigned and that payment is to be made to the assignee. After receipt of thenotification, the account debtor may discharge its obligation by paying theassignee and may not discharge the obligation by paying the assignor.
(b) When notification ineffective. Subject tosubsection (h), notification is ineffective under subsection (a):
(1) If it does not reasonably identify the rights assigned;
(2) To the extent that an agreement between an account debtorand a seller of a payment intangible limits the account debtor's duty to pay aperson other than the seller and the limitation is effective under law otherthan this chapter; or
(3) At the option of an account debtor, if the notificationnotifies the account debtor to make less than the full amount of anyinstallment or other periodic payment to the assignee, even if:
(i) Only a portion of the account, chattel paper, or paymentintangible has been assigned to that assignee;
(ii) A portion has been assigned to another assignee; or
(iii) The account debtor knows that the assignment to thatassignee is limited.
(c) Proof of assignment. Subject to subsection (h), ifrequested by the account debtor, an assignee shall seasonably furnishreasonable proof that the assignment has been made. Unless the assigneecomplies, the account debtor may discharge its obligation by paying theassignor, even if the account debtor has received a notification undersubsection (a).
(d) Term restricting assignment generally ineffective.Except as otherwise provided in subsection (e) and § 6A-2.1-303 and §6A-9-407, and subject to subsection (h), a term in an agreement between anaccount debtor and an assignor or in a promissory note is ineffective to theextent that it:
(1) Prohibits, restricts, or requires the consent of theaccount debtor 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 give riseto a default, breach, right of recoupment, claim, defense, termination, rightof termination, or remedy under the account, chattel paper, payment intangible,or promissory note.
(e) Inapplicability of subsection (d) to certainsales. Subsection (d) does not apply to the sale of a payment intangible orpromissory note.
(f) Legal restrictions on assignment generallyineffective. Except as otherwise provided in §§ 6A-2.1-303 and6A-9-407 and subject to subsections (h) and (i), a rule of law, statute, orregulation that prohibits, restricts, or requires the consent of a government,governmental body or official, or account debtor to the assignment or transferof, or creation of a security interest in, an account or chattel paper isineffective to the extent that the rule of law, statute, or regulation:
(1) Prohibits, restricts, or requires the consent of thegovernment, governmental body or official, or account debtor to the assignmentor transfer 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 give riseto a default, breach, right of recoupment, claim, defense, termination, rightof termination, or remedy under the account or chattel paper.
(g) Subsection (b)(3) not waivable. Subject tosubsection (h), an account debtor may not waive or vary its option undersubsection (b)(3).
(h) Rule for individual under other law. This sectionis subject to law other than this chapter which establishes a different rulefor an account debtor who is an individual and who incurred the obligationprimarily for personal, family, or household purposes.
(i) Inapplicability to health-care-insurancereceivable. This section does not apply to an assignment of ahealth-care-insurance receivable.
(j) Section prevails over inconsistent law. Thissection prevails over any statutes, rules, and regulations inconsistent withthis section.
