§490:9-406 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. (a) Subject to subsections (b) through (j), 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, signed 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 subsections (h) and (j), notification shall be deemed ineffective under subsection (a):
(c) Subject to subsections (h) and (j), 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) In this subsection, "promissory note" includes a negotiable instrument that evidences chattel paper. Except as otherwise provided in subsection (e) and sections 490:2A-303 and 490:9-407, and subject to subsection (h), a term in an agreement between an account debtor and an assignor or in a promissory note shall be deemed ineffective to the extent that it:
(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 490:9-610 or an acceptance of collateral under section 490:9-620.
(f) Except as otherwise provided in sections 490:2A-303 and 490:9-407, 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 shall be ineffective to the extent that the rule of law, statute, or regulation:
(g) Subject to subsections (h) and (j), 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 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.
(i) This section does not apply to an assignment of a health-care-insurance receivable.
(j) Subsections (a), (b), (c), and (g) shall not apply to a controllable account or controllable payment intangible. [L 2000, c 241, pt of §1; am L 2001, c 228, §5; am L 2012, c 33, §9; am L 2023, c 132, §56]