(2)__Subsection (1) applies to the extent that:

(a)__The right to payment or a part thereof under an assigned contract has not been fully earned by performance; or

(b)__The right to payment or a part thereof has been fully earned by performance and the account debtor has not received notification of the assignment under section 9- 1406, subsection (1).

(3)__This section is subject to law other than this Article that establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family or household purposes.

(4)__This section does not apply to an assignment of a health- care-insurance receivable.

Official Comment

1. Source. Former Section 9-318(2).

2. Modification of Assigned Contract. The ability of account debtors and assignors to modify assigned contracts can be important, especially in the case of government contracts and complex contractual arrangements (e.g., construction contracts) with respect to which modifications are customary. Subsections (a) and (b) [Maine cite subsections (1) and (2)] provide that good-faith modifications of assigned contracts are binding against an assignee to the extent that (i) the right to payment has not been fully earned or (ii) the right to payment has been earned and notification of the assignment has not been given to the account debtor. Former Section 9-318(2) did not validate modifications of fully-performed contracts under any circumstances, whether or not notification of the assignment had been given to the account debtor. Subsection (a) [Maine cite subsection (1)] protects the interests of assignees by (i) limiting the effectiveness of modifications to those made in good faith, (ii) affording the assignee with corresponding rights under the contract as modified, and (iii) recognizing that the modification may be a breach of the assignor's agreement with the assignee.