TITLE 6A
Uniform Commercial Code
CHAPTER 6A-9
Secured Transactions
PART 6A-9-401
Rights of Third Parties
SECTION 6A-9-408
§ 6A-9-408 Restrictions on assignment of
promissory notes, health-care insurance receivables, and certain general
intangibles ineffective.
(a) Term restricting assignment generally ineffective. Except as
otherwise provided in subsection (b), a term in a promissory note or in an
agreement between an account debtor and a debtor which relates to a
health-care-insurance receivable or a general intangible, including a contract,
permit, license, or franchise, and which term prohibits, restricts, or requires
the consent of the person obligated on the promissory note or the account
debtor to, the assignment or transfer of, or creation, attachment, or
perfection of a security interest in, the promissory note,
health-care-insurance receivable, or general intangible, is ineffective to the
extent that the term:
(1) Would impair the creation, attachment, or perfection of a
security 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, or
general intangible.
(b) Applicability of subsection (a) to sales of certain
rights to payment. Subsection (a) applies to a security interest in a
payment intangible or promissory note only if the security interest arises out
of a sale of the payment intangible or promissory note, other than a sale
pursuant to a disposition under § 6A-9-610 or an acceptance of collateral
under § 6A-9-620.
(c) Legal restrictions on assignment generally
ineffective. A rule of law, statute, or regulation that prohibits,
restricts, or requires the consent of a government, governmental body or
official, person obligated on a promissory note, or account debtor to the
assignment or transfer of, or creation of a security interest in, a promissory
note, health-care-insurance receivable, or general intangible, including a
contract, 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 a
security 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, or
general intangible.
(d) Limitation on ineffectiveness under subsections (a)
and (c). To the extent that a term in a promissory note or in an agreement
between an account debtor and a debtor which relates to a health-care-insurance
receivable or general intangible or a rule of law, statute, or regulation
described in subsection (c) would be effective under law other than this
chapter 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 the
promissory note or the account debtor;
(2) Does not impose a duty or obligation on the person
obligated on the promissory note or the account debtor;
(3) Does not require the person obligated on the promissory
note or the account debtor to recognize the security interest, pay or render
performance to the secured party, or accept payment or performance from the
secured party;
(4) Does not entitle the secured party to use or assign the
debtor's rights under the promissory note, health-care-insurance receivable, or
general intangible, including any related information or materials furnished to
the 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 the
person obligated on the promissory note or the account debtor; and
(6) Does not entitle the secured party to enforce the
security interest in the promissory note, health-care-insurance receivable, or
general intangible.
(e) Section prevails over inconsistent law. This
section prevails over any statutes, rules, and regulations inconsistent with
this section.
History of Section.
(P.L. 2000, ch. 182, § 6; P.L. 2000, ch. 420, § 6; P.L. 2011, ch.
173, § 2; P.L. 2011, ch. 192, § 2.)
