§ 6A-9-408 Restrictions on assignment ofpromissory notes, health-care insurance receivables, and certain generalintangibles ineffective. – (a) Term restricting assignment generally ineffective. Except asotherwise provided in subsection (b), a term in a promissory note or in anagreement between an account debtor and a debtor which relates to ahealth-care-insurance receivable or a general intangible, including a contract,permit, license, or franchise, and which term prohibits, restricts, or requiresthe consent of the person obligated on the promissory note or the accountdebtor to, the assignment or transfer of, or creation, attachment, orperfection of a security interest in, the promissory note,health-care-insurance receivable, or general intangible, is ineffective to theextent that the term:
(1) Would impair the creation, attachment, or perfection of asecurity interest; or
(2) Provides that the assignment or transfer or the creation,attachment, or perfection of the security interest may give rise to a default,breach, right of recoupment, claim, defense, termination, right of termination,or remedy under the promissory note, health-care-insurance receivable, orgeneral intangible.
(b) Applicability of subsection (a) to sales of certainrights to payment. Subsection (a) applies to a security interest in apayment intangible or promissory note only if the security interest arises outof a sale of the payment intangible or promissory note.
(c) Legal restrictions on assignment generallyineffective. A rule of law, statute, or regulation that prohibits,restricts, or requires the consent of a government, governmental body orofficial, person obligated on a promissory note, or account debtor to theassignment or transfer of, or creation of a security interest in, a promissorynote, health-care-insurance receivable, or general intangible, including acontract, permit, license, or franchise between an account debtor and a debtor,is ineffective to the extent that the rule of law, statute, or regulation:
(1) Would impair the creation, attachment, or perfection of asecurity interest; or
(2) Provides that the assignment or transfer or the creation,attachment, or perfection of the security interest may give rise to a default,breach, right of recoupment, claim, defense, termination, right of termination,or remedy under the promissory note, health-care-insurance receivable, orgeneral intangible.
(d) Limitation on ineffectiveness under subsections (a)and (c). To the extent that a term in a promissory note or in an agreementbetween an account debtor and a debtor which relates to a health-care-insurancereceivable or general intangible or a rule of law, statute, or regulationdescribed in subsection (c) would be effective under law other than thischapter but is ineffective under subsection (a) or (c), the creation,attachment, or perfection of a security interest in the promissory note,health-care-insurance receivable, or general intangible:
(1) Is not enforceable against the person obligated on thepromissory note or the account debtor;
(2) Does not impose a duty or obligation on the personobligated on the promissory note or the account debtor;
(3) Does not require the person obligated on the promissorynote or the account debtor to recognize the security interest, pay or renderperformance to the secured party, or accept payment or performance from thesecured party;
(4) Does not entitle the secured party to use or assign thedebtor's rights under the promissory note, health-care-insurance receivable, orgeneral intangible, including any related information or materials furnished tothe debtor in the transaction giving rise to the promissory note,health-care-insurance receivable, or general intangible;
(5) Does not entitle the secured party to use, assign,possess, or have access to any trade secrets or confidential information of theperson obligated on the promissory note or the account debtor; and
(6) Does not entitle the secured party to enforce thesecurity interest in the promissory note, health-care-insurance receivable, orgeneral intangible.
(e) Section prevails over inconsistent law. Thissection prevails over any statutes, rules, and regulations inconsistent withthis section.
§ 6A-9-408 Restrictions on assignment ofpromissory notes, health-care insurance receivables, and certain generalintangibles ineffective. – (a) Term restricting assignment generally ineffective. Except asotherwise provided in subsection (b), a term in a promissory note or in anagreement between an account debtor and a debtor which relates to ahealth-care-insurance receivable or a general intangible, including a contract,permit, license, or franchise, and which term prohibits, restricts, or requiresthe consent of the person obligated on the promissory note or the accountdebtor to, the assignment or transfer of, or creation, attachment, orperfection of a security interest in, the promissory note,health-care-insurance receivable, or general intangible, is ineffective to theextent that the term:
(1) Would impair the creation, attachment, or perfection of asecurity interest; or
(2) Provides that the assignment or transfer or the creation,attachment, or perfection of the security interest may give rise to a default,breach, right of recoupment, claim, defense, termination, right of termination,or remedy under the promissory note, health-care-insurance receivable, orgeneral intangible.
(b) Applicability of subsection (a) to sales of certainrights to payment. Subsection (a) applies to a security interest in apayment intangible or promissory note only if the security interest arises outof a sale of the payment intangible or promissory note.
(c) Legal restrictions on assignment generallyineffective. A rule of law, statute, or regulation that prohibits,restricts, or requires the consent of a government, governmental body orofficial, person obligated on a promissory note, or account debtor to theassignment or transfer of, or creation of a security interest in, a promissorynote, health-care-insurance receivable, or general intangible, including acontract, permit, license, or franchise between an account debtor and a debtor,is ineffective to the extent that the rule of law, statute, or regulation:
(1) Would impair the creation, attachment, or perfection of asecurity interest; or
(2) Provides that the assignment or transfer or the creation,attachment, or perfection of the security interest may give rise to a default,breach, right of recoupment, claim, defense, termination, right of termination,or remedy under the promissory note, health-care-insurance receivable, orgeneral intangible.
(d) Limitation on ineffectiveness under subsections (a)and (c). To the extent that a term in a promissory note or in an agreementbetween an account debtor and a debtor which relates to a health-care-insurancereceivable or general intangible or a rule of law, statute, or regulationdescribed in subsection (c) would be effective under law other than thischapter but is ineffective under subsection (a) or (c), the creation,attachment, or perfection of a security interest in the promissory note,health-care-insurance receivable, or general intangible:
(1) Is not enforceable against the person obligated on thepromissory note or the account debtor;
(2) Does not impose a duty or obligation on the personobligated on the promissory note or the account debtor;
(3) Does not require the person obligated on the promissorynote or the account debtor to recognize the security interest, pay or renderperformance to the secured party, or accept payment or performance from thesecured party;
(4) Does not entitle the secured party to use or assign thedebtor's rights under the promissory note, health-care-insurance receivable, orgeneral intangible, including any related information or materials furnished tothe debtor in the transaction giving rise to the promissory note,health-care-insurance receivable, or general intangible;
(5) Does not entitle the secured party to use, assign,possess, or have access to any trade secrets or confidential information of theperson obligated on the promissory note or the account debtor; and
(6) Does not entitle the secured party to enforce thesecurity interest in the promissory note, health-care-insurance receivable, orgeneral intangible.
(e) Section prevails over inconsistent law. Thissection prevails over any statutes, rules, and regulations inconsistent withthis section.
§ 6A-9-408 Restrictions on assignment ofpromissory notes, health-care insurance receivables, and certain generalintangibles ineffective. – (a) Term restricting assignment generally ineffective. Except asotherwise provided in subsection (b), a term in a promissory note or in anagreement between an account debtor and a debtor which relates to ahealth-care-insurance receivable or a general intangible, including a contract,permit, license, or franchise, and which term prohibits, restricts, or requiresthe consent of the person obligated on the promissory note or the accountdebtor to, the assignment or transfer of, or creation, attachment, orperfection of a security interest in, the promissory note,health-care-insurance receivable, or general intangible, is ineffective to theextent that the term:
(1) Would impair the creation, attachment, or perfection of asecurity interest; or
(2) Provides that the assignment or transfer or the creation,attachment, or perfection of the security interest may give rise to a default,breach, right of recoupment, claim, defense, termination, right of termination,or remedy under the promissory note, health-care-insurance receivable, orgeneral intangible.
(b) Applicability of subsection (a) to sales of certainrights to payment. Subsection (a) applies to a security interest in apayment intangible or promissory note only if the security interest arises outof a sale of the payment intangible or promissory note.
(c) Legal restrictions on assignment generallyineffective. A rule of law, statute, or regulation that prohibits,restricts, or requires the consent of a government, governmental body orofficial, person obligated on a promissory note, or account debtor to theassignment or transfer of, or creation of a security interest in, a promissorynote, health-care-insurance receivable, or general intangible, including acontract, permit, license, or franchise between an account debtor and a debtor,is ineffective to the extent that the rule of law, statute, or regulation:
(1) Would impair the creation, attachment, or perfection of asecurity interest; or
(2) Provides that the assignment or transfer or the creation,attachment, or perfection of the security interest may give rise to a default,breach, right of recoupment, claim, defense, termination, right of termination,or remedy under the promissory note, health-care-insurance receivable, orgeneral intangible.
(d) Limitation on ineffectiveness under subsections (a)and (c). To the extent that a term in a promissory note or in an agreementbetween an account debtor and a debtor which relates to a health-care-insurancereceivable or general intangible or a rule of law, statute, or regulationdescribed in subsection (c) would be effective under law other than thischapter but is ineffective under subsection (a) or (c), the creation,attachment, or perfection of a security interest in the promissory note,health-care-insurance receivable, or general intangible:
(1) Is not enforceable against the person obligated on thepromissory note or the account debtor;
(2) Does not impose a duty or obligation on the personobligated on the promissory note or the account debtor;
(3) Does not require the person obligated on the promissorynote or the account debtor to recognize the security interest, pay or renderperformance to the secured party, or accept payment or performance from thesecured party;
(4) Does not entitle the secured party to use or assign thedebtor's rights under the promissory note, health-care-insurance receivable, orgeneral intangible, including any related information or materials furnished tothe debtor in the transaction giving rise to the promissory note,health-care-insurance receivable, or general intangible;
(5) Does not entitle the secured party to use, assign,possess, or have access to any trade secrets or confidential information of theperson obligated on the promissory note or the account debtor; and
(6) Does not entitle the secured party to enforce thesecurity interest in the promissory note, health-care-insurance receivable, orgeneral intangible.
(e) Section prevails over inconsistent law. Thissection prevails over any statutes, rules, and regulations inconsistent withthis section.
