| it probably does not change the rule that applied under former | Article 9. Former Section 9-318(3) referred to the account | debtor's obligation to "pay," indicating that the subsection was | limited to account debtors on accounts, chattel paper, and other | payment obligations. |
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| | 3. Limitations on Effectiveness of Notification. Subsection | (b) [Maine cite subsection (2)] contains some special rules | concerning the effectiveness of a notification under subsection | (a) [Maine cite subsection (1)]. |
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| | Subsection (b)(1) [Maine cite subsection (2), paragraph (a)] | tracks former Section 9-318(3) by making ineffective a | notification that does not reasonably identify the rights | assigned. A reasonable identification need not identify the | right to payment with specificity, but what is reasonable also is | not left to the arbitrary decision of the account debtor. If an | account debtor has doubt as to the adequacy of a notification, it | may not be safe in disregarding the notification unless it | notifies the assignee with reasonable promptness as to the | respects in which the account debtor considers the notification | defective. |
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| | Subsection (b)(2) [Maine cite subsection (2), paragraph (b)], | which is new, applies only to sales of payment intangibles. It | makes a notification ineffective to the extent that other law | gives effect to an agreement between an account debtor and a | seller of a payment intangible that limits the account debtor's | duty to pay a person other than the seller. Payment intangibles | are substantially less fungible than accounts and chattel paper. | In some (e.g., commercial bank loans), account debtors | customarily and legitimately expect that they will not be | required to pay any person other than the financial institution | that has advanced funds. |
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| | It has become common in financing transactions to assign | interests in a single obligation to more than one assignee. | Requiring an account debtor that owes a single obligation to make | multiple payments to multiple assignees would be unnecessarily | burdensome. Thus, under subsection (b)(3) [Maine cite subsection | (2), paragraph (c)], an account debtor that is notified to pay an | assignee less than the full amount of any installment or other | periodic payment has the option to treat the notification as | ineffective, ignore the notice, and discharge the assigned | obligation by paying the assignor. Some account debtors may not | realize that the law affords them the right to ignore certain | notices of assignment with impunity. By making the notification | ineffective at the account debtor's option, subsection (b)(3) | [Maine cite subsection (2), paragraph (c)] permits an account | debtor to pay the assignee in accordance with the notice and | thereby to satisfy its obligation pro tanto. Under subsection | (g) [Maine cite subsection (7)], the | rights and duties created by subsection (b)(3) [Maine cite | subsection (2), paragraph (c)] cannot be waived or varied. |
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| | 4. Proof of Assignment. Subsection (c) [Maine cite | subsection (3)] links payment with discharge, as in subsection | (a) [Maine cite subsection (1)]. It follows former Section 9- | 318(3) in referring to the right of the account debtor to pay the | assignor if the requested proof of assignment is not seasonably | forthcoming. Even if the proof is not forthcoming, the | notification of assignment would remain effective, so that, in | the absence of reasonable proof of the assignment, the account | debtor could discharge the obligation by paying either the | assignee or the assignor. Of course, if the assignee did not in | fact receive an assignment, the account debtor cannot discharge | its obligation by paying a putative assignee who is a stranger. | The observations in Comment 3 concerning the reasonableness of an | identification of a right to payment also apply here. An account | debtor that questions the adequacy of proof submitted by an | assignor would be well advised to promptly inform the assignor of | the defects. |
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| | An account debtor may face another problem if its obligation | becomes due while the account debtor is awaiting reasonable proof | of the assignment that it has requested from the assignee. This | section does not excuse the account debtor from timely compliance | with its obligations. Consequently, an account debtor that has | received a notification of assignment and who has requested | reasonable proof of the assignment may discharge its obligation | by paying the assignor at the time (or even earlier if reasonably | necessary to avoid risk of default) when a payment is due, even | if the account debtor has not yet received a response to its | request for proof. On the other hand, after requesting | reasonable proof of the assignment, an account debtor may not | discharge its obligation by paying the assignor substantially in | advance of the time that the payment is due unless the assignee | has failed to provide the proof seasonably. |
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| | 5. Contractual Restrictions on Assignment. Former Section 9- | 318(4) rendered ineffective an agreement between an account | debtor and an assignor which prohibited assignment of an account | (whether outright or to secure an obligation) or prohibited a | security assignment of a general intangible for the payment of | money due or to become due. Subsection (d) [Maine cite | subsection (4)] essentially follows former Section 9-318(4), but | expands the rule of free assignability to chattel paper (subject | to Sections 2-1303 and 9-407 [Maine cite section 9-1407]) and | promissory notes and explicitly overrides both restrictions and | prohibitions of assignment. The policies underlying the |
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