1. A modification of or substitution for an assigned contract is effective against an assignee if made in good faith. The assignee acquires corresponding rights under the modified or substituted contract. The assignment may provide that the modification or substitution is a breach of contract by the assignor. This subsection is subject to subsections 2 through 4. 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 subsection 1 of section 41-09-68. 3. This section is subject to law other than this chapter which 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.
41-09-68. (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. 1. Subject to subsections 2 through 9 and 12, 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. 2. Subject to subsections 8 and 12, notification is ineffective under subsection 1: a. If it does not reasonably identify the rights assigned; b. To the extent that an agreement between an account debtor and a seller of a payment intangible limits the account debtor's duty to pay a person other than the seller and the limitation is effective under law other than this chapter; or c. At the option of an account debtor, if the notification notifies the account debtor to make less than the full amount of any installment or other periodic payment to the assignee, even if: (1) Only a portion of the account, chattel paper, or payment intangible has been assigned to that assignee; (2) A portion has been assigned to another assignee; or (3) The account debtor knows that the assignment to that assignee is limited. 3. Subject to subsections 8 and 12, 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 1. 4. In this subsection, "promissory note" includes a negotiable instrument that evidences chattel paper. Except as otherwise provided in subsections 5 and 11 and sections 41-02.1-33 and 41-09-69, and subject to subsection 8, a term in an agreement between an account debtor and an assignor or in a promissory note is ineffective to the extent that it: a. Prohibits, restricts, or requires the consent of the account debtor or person obligated on the promissory note to the assignment or transfer of, or the creation,
attachment, perfection, or enforcement of a security interest in, the account, chattel paper, payment intangible, or promissory note; or b. Provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account, chattel paper, payment intangible, or promissory note. 5. Subsection 4 does not apply to the sale of a payment intangible or promissory note, other than a sale pursuant to a disposition under section 41-09-107 or an acceptance of collateral under section 41-09-115. 6. Except as otherwise provided in subsection 11 and sections 41-02.1-33 and 41-09-69 and subject to subsections 8 and 9, 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 is ineffective to the extent that the rule of law, statute, or regulation: a. Prohibits, restricts, or requires the consent of the government, governmental body or official, or account debtor to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in the account or chattel paper; or b. Provides that the assignment, transfer, creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account or chattel paper. 7. Subject to subsections 8 and 12, an account debtor may not waive or vary its option under subdivision c of subsection 2. 8. This section is subject to law other than this chapter which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes. 9. This section does not apply to an assignment of a health care insurance receivable. 10. This section prevails over any inconsistent statute, rule, or regulation. 11. Subsections 4, 6, and 10 do not apply to a security interest in an ownership interest in a general partnership, limited partnership, or limited liability company. 12. Subsections 1, 2, 3, and 7 do not apply to a controllable account or controllable payment intangible.
41-09-69. (9-407) Restrictions on creation or enforcement of security interest in leasehold interest or in lessor's residual interest. 1. Except as otherwise provided in subsection 2, a term in a lease agreement is ineffective to the extent that the term: a. Prohibits, restricts, or requires the consent of a party to the lease to the assignment, transfer, creation, attachment, perfection, or enforcement of a security interest in an interest of a party under the lease contract or in the lessor's residual interest in the goods; or b. Provides that the assignment, transfer, creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the lease. 2. Except as otherwise provided in subsection 6 of section 41-02.1-33, a term described in subdivision b of subsection 1 is effective to the extent that there is: a. A transfer by the lessee of the lessee's right of possession or use of the goods in violation of the term; or b. A delegation of a material performance of either party to the lease contract in violation of the term. 3. The creation, attachment, perfection, or enforcement of a security interest in the lessor's interest under the lease contract or the lessor's residual interest in the goods is not a transfer that materially impairs the lessee's prospect of obtaining return
performance or materially changes the duty of or materially increases the burden or risk imposed on the lessee within the purview of subsection 4 of section 41-02.1-33 unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the lessor.
41-09-70. (9-408) Restrictions on assignment of promissory notes, health care insurance receivables, and certain general intangibles ineffective. 1. Except as otherwise provided in subsections 2 and 6, 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: a. Would impair the creation, attachment, or perfection of a security interest; or b. Provides that the assignment, transfer, 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. 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, other than a sale pursuant to a disposition under section 41-09-107 or an acceptance of collateral under section 41-09-115. 3. Except as otherwise provided in subsection 6, 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 b. Provides that the assignment, transfer, 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. 4. 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 3 would be effective under law other than this chapter 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; b. Does not impose a duty or obligation on the person obligated on the promissory note or the account debtor; 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; 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;
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 f. Does not entitle the secured party to enforce the security interest in the promissory note, health care insurance receivable, or general intangible. 5. This section prevails over any inconsistent statute, rule, or regulation. 6. This section does not apply to a security interest in an ownership interest in a general partnership, limited partnership, or limited liability company. 7. In this section, "promissory note" includes a negotiable instrument that evidences chattel paper.