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Section: 400.009.0406 Discharge of account debtor--notification of assignment--identification and proof of assignment--restrictions on assignment of accounts, chattel paper, payment intangibles and promissory notes ineffective. RSMO 400.09-406


Published: 2015

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Missouri Revised Statutes













Chapter 400

Uniform Commercial Code

←400.09-405

Section 400.9-406.1

400.09-407→

August 28, 2015

Discharge of account debtor--notification of assignment--identification and proof of assignment--restrictions on assignment of accounts, chattel paper, payment intangibles and promissory notes ineffective.

400.9-406. (a) Subject to subsections (b) through (i), an account

debtor on an account, chattel paper, or a payment intangible may discharge

its obligation by paying the assignor until, but not after, the account

debtor receives a notification, authenticated by the assignor or the

assignee, that the amount due or to become due has been assigned and that

payment is to be made to the assignee. After receipt of the notification,

the account debtor may discharge its obligation by paying the assignee and

may not discharge the obligation by paying the assignor.



(b) Subject to subsection (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 debtor and a

seller of a payment intangible limits the account debtor's duty to pay a

person other than the seller and the limitation is effective under law

other than this article; or



(3) At the option of an account debtor, if the notification notifies

the account debtor to make less than the full amount of any installment or

other periodic payment to the assignee, even if:



(A) Only a portion of the account, chattel paper, or general

intangible 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 is

limited.



(c) Subject to subsection (h), if requested by the account debtor, an

assignee shall seasonably furnish reasonable proof that the assignment has

been made. Unless the assignee complies, the account debtor may discharge

its obligation by paying the assignor, even if the account debtor has

received a notification under subsection (a).



(d) Except as otherwise provided in subsection (e) and sections

400.2A-303 and 400.9-407, and subject to subsection (h), a term in an

agreement between an account debtor and an assignor or in a promissory note

is ineffective to the extent that it:



(1) Prohibits, restricts, or requires the consent of the account

debtor or person obligated on the promissory note to the assignment or

transfer of, or the creation, attachment, perfection, or enforcement of a

security interest in, the account, chattel paper, payment intangible, or

promissory note; or



(2) Provides that the assignment or transfer or the creation,

attachment, perfection, or enforcement of the security interest may give

rise to a default, breach, right of recoupment, claim, defense,

termination, right of termination, or remedy under the account, chattel

paper, payment intangible, or promissory note.



(e) Subsection (d) does not apply to the sale of a payment intangible

or promissory note, other than a sale pursuant to a disposition under

section 400.9-610 or an acceptance of collateral under section 400.9-620.



(f) Except as otherwise provided in sections 400.2A-303 and

400.9-407, and subject to subsections (h) and (i), a rule of law, statute,

or regulation, that prohibits, restricts, or requires the consent of a

government, governmental body or official, or account debtor to the

assignment or transfer of, or creation of a security interest in, an

account 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 or

transfer of, or the creation, attachment, perfection, or enforcement of a

security 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

rise to a default, breach, right of recoupment, claim, defense,

termination, right of termination, or remedy under the account or chattel

paper.



(g) Subject to subsection (h), an account debtor may not waive or

vary its option under subsection (b)(3).



(h) This section is subject to law other than this article which

establishes a different rule for an account debtor who is an individual and

who incurred the obligation primarily for personal, family, or household

purposes.



(i) This section does not apply to an assignment of a

health-care-insurance receivable.



(j) This section prevails over any inconsistent provisions of any

statutes, rules, and regulations.



(L. 1963 p. 503 § 9-406, A.L. 1965 p. 595, A.L. 1978 S.B. 755, A.L.

1988 S.B. 583, A.L. 2001 S.B. 288, A.L. 2002 S.B. 895, A.L. 2013

H.B. 212)





2002

2001

1991



2002



400.9-406. (a) Subject to subsections (b) through (i), an account

debtor on an account, chattel paper, or a payment intangible may discharge

its obligation by paying the assignor until, but not after, the account

debtor receives a notification, authenticated by the assignor or the assignee,

that the amount due or to become due has been assigned and that payment is to

be made to the assignee. After receipt of the notification, the account

debtor may discharge its obligation by paying the assignee and may not

discharge the obligation by paying the assignor.



(b) Subject to subsection (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 debtor and a

seller of a payment intangible limits the account debtor's duty to pay a

person other than the seller and the limitation is effective under law other

than this article; or



(3) At the option of an account debtor, if the notification notifies the

account debtor to make less than the full amount of any installment or other

periodic payment to the assignee, even if:



(A) Only a portion of the account, chattel paper, or general intangible

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 is

limited.



(c) Subject to subsection (h), if requested by the account debtor, an

assignee shall seasonably furnish reasonable proof that the assignment has

been made. Unless the assignee complies, the account debtor may discharge its

obligation by paying the assignor, even if the account debtor has received a

notification under subsection (a).



(d) Except as otherwise provided in subsection (e) and sections

400.2A-303 and 400.9-407, and subject to subsection (h), a term in an

agreement between an account debtor and an assignor or in a promissory note

is ineffective to the extent that it:



(1) Prohibits, restricts, or requires the consent of the account debtor

or person obligated on the promissory note to the assignment or transfer of,

or the creation, attachment, perfection, or enforcement of a security

interest in, the account, chattel paper, payment intangible, or promissory

note; or



(2) Provides that the assignment or transfer or the creation,

attachment, perfection, or enforcement of the security interest may give rise

to a default, breach, right of recoupment, claim, defense, termination, right

of termination, or remedy under the account, chattel paper, payment

intangible, or promissory note.



(e) Subsection (d) does not apply to the sale of a payment intangible or

promissory note.



(f) Except as otherwise provided in sections 400.2A-303 and 400.9-407,

and subject to subsections (h) and (i), a rule of law, statute, or

regulation, that prohibits, restricts, or requires the consent of a

government, governmental body or official, or account debtor to the

assignment or transfer of, or creation of a security interest in, an account

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 or

transfer of, or the creation, attachment, perfection, or enforcement of a

security 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 rise

to a default, breach, right of recoupment, claim, defense, termination, right

of termination, or remedy under the account or chattel paper.



(g) Subject to subsection (h), an account debtor may not waive or vary

its option under subsection (b)(3).



(h) This section is subject to law other than this article which

establishes a different rule for an account debtor who is an individual and

who incurred the obligation primarily for personal, family, or household

purposes.



(i) This section does not apply to an assignment of a

health-care-insurance receivable.



(j) This section prevails over any inconsistent provisions of any

statutes, rules, and regulations.



2001



400.9-406. (a) Subject to subsections (b) through (i), an account

debtor on an account, chattel paper, or a payment intangible may discharge

its obligation by paying the assignor until, but not after, the account

debtor receives a notification, authenticated by the assignor or the

assignee, that the amount due or to become due has been assigned and that

payment is to be made to the assignee. After receipt of the notification,

the account debtor may discharge its obligation by paying the assignee and

may not discharge the obligation by paying the assignor.



(b) Subject to subsection (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 debtor and a

seller of a payment intangible limits the account debtor's duty to pay a

person other than the seller and the limitation is effective under law

other than this article; or



(3) At the option of an account debtor, if the notification notifies

the account debtor to make less than the full amount of any installment or

other periodic payment to the assignee, even if:



(A) Only a portion of the account, chattel paper, or general

intangible 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 is

limited.



(c) Subject to subsection (h), if requested by the account debtor, an

assignee shall seasonably furnish reasonable proof that the assignment has

been made. Unless the assignee complies, the account debtor may discharge

its obligation by paying the assignor, even if the account debtor has

received a notification under subsection (a).



(d) Except as otherwise provided in subsection (e) and sections

400.2A-303 and 400.9-407, and subject to subsection (h), a term in an

agreement between an account debtor and an assignor or in a promissory note

is ineffective to the extent that it:



(1) Prohibits, restricts, or requires the consent of the account

debtor or person obligated on the promissory note to the assignment or

transfer of, or the creation, attachment, perfection, or enforcement of a

security interest in, the account, chattel paper, payment intangible, or

promissory note; or



(2) Provides that the creation, attachment, perfection, or

enforcement of the security interest may give rise to a default, breach,

right of recoupment, claim, defense, termination, right of termination, or

remedy under the account, chattel paper, payment intangible, or promissory

note.



(e) Subsection (d) does not apply to the sale of a payment intangible

or promissory note.



(f) Except as otherwise provided in sections 400.2A-303 and 400.9-

407, and subject to subsections (h) and (i), a rule of law, statute, or

regulation, that prohibits, restricts, or requires the consent of a

government, governmental body or official, or account debtor to the

assignment or transfer of, or creation of a security interest in, an

account 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 or

transfer of, or the creation, attachment, perfection, or enforcement of a

security interest in, the account or chattel paper; or



(2) Provides that the creation, attachment, perfection, or

enforcement of the security interest may give rise to a default, breach,

right of recoupment, claim, defense, termination, right of termination, or

remedy under the account or chattel paper.



(g) Subject to subsection (h), an account debtor may not waive or

vary its option under subsection (b)(3).



(h) This section is subject to law other than this article which

establishes a different rule for an account debtor who is an individual and

who incurred the obligation primarily for personal, family, or household

purposes.



(i) This section does not apply to an assignment of a health-care-

insurance receivable.



(j) This section prevails over any inconsistent provisions of any

statutes, rules, and regulations.



1991



400.9-406. A secured party of record may by his signed

statement release all or a part of any collateral described in a

filed financing statement. The statement of release is

sufficient if it contains a description of the collateral being

released, the name and address of the debtor, the name and

address of the secured party, and the file number of the

financing statement. A statement of release signed by a person

other than the secured party of record must be accompanied by a

separate written statement of assignment signed by the secured

party of record and complying with subsection (2) of section

400.9-405, including payment of the required fee. Upon

presentation of such a statement of release to the filing officer

he shall mark the statement with the hour and date of filing and

shall note the same upon the margin of the index of the filing of

the financing statement. The uniform fee for filing and noting

such a statement of release shall be four dollars if the

statement is of the standard size prescribed by the secretary of

state and otherwise shall be six dollars, plus one dollar per

page for attachments.



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