§9-1408. Restrictions on assignment of promissory notes, health-care-insurance receivables and certain general intangibles ineffective
(1).
Except as otherwise provided in subsection (2), a term in a promissory note or in an agreement between an account debtor
and a debtor that 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:
(a). Would impair the creation, attachment or perfection of a security interest; or [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]
(b). 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. [2001, c. 471, Pt. A, §16 (AMD); 2001, c. 471, Pt. A, §18 (AFF).]
[
2001, c. 471, Pt. A, §16 (AMD);
2001, c. 471, Pt. A, §18 (AFF)
.]
(2).
Subsection (1) 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.
[
1999, c. 699, Pt. A, §2 (NEW);
1999, c. 699, Pt. A, §4 (AFF)
.]
(3).
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:
(a). Would impair the creation, attachment or perfection of a security interest; or [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]
(b). 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. [2001, c. 471, Pt. A, §17 (AMD); 2001, c. 471, Pt. A, §18 (AFF).]
[
2001, c. 471, Pt. A, §17 (AMD);
2001, c. 471, Pt. A, §18 (AFF)
.]
(4).
To the extent that a term in a promissory note or in an agreement between an account debtor and a debtor that relates to
a health-care-insurance receivable or general intangible or a rule of law, statute or regulation described in subsection (3)
would be effective under law other than this Article but is ineffective under subsection (1) or (3), the creation, attachment
or perfection of a security interest in the promissory note, health-care-insurance receivable or general intangible:
(a). Is not enforceable against the person obligated on the promissory note or the account debtor; [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]
(b). Does not impose a duty or obligation on the person obligated on the promissory note or the account debtor; [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]
(c). 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; [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]
(d). 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; [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]
(e). 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 [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]
(f). Does not entitle the secured party to enforce the security interest in the promissory note, health-care-insurance receivable
or general intangible. [1999, c. 699, Pt. A, §2 (NEW); 1999, c. 699, Pt. A, §4 (AFF).]
[
1999, c. 699, Pt. A, §2 (NEW);
1999, c. 699, Pt. A, §4 (AFF)
.]
SECTION HISTORY
1999, c. 699, §A2 (NEW).
1999, c. 699, §A4 (AFF).
2001, c. 471, §§A16,17 (AMD).
2001, c. 471, §A18 (AFF).
Data for this page extracted on 10/16/2012 08:20:53.