§ 9403. Agreement not to assert defenses against assignee.

366 words·~2 min read·/pa/title-13/chapter-94/9403

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)Value.-- As used in this section, the term "value" has the meaning provided in section 3303(a) (relating to value).

(b)Agreement not to assert claim or defense.-- Except as otherwise provided in this section, an agreement between an account debtor and an assignor not to assert against an assignee any claim or defense which the account debtor may have against the assignor is enforceable by an assignee that takes an assignment:

(1)for value;

(2)in good faith;

(3)without notice of a claim of a property or possessory right to the property assigned; and

(4)without notice of a defense or claim in recoupment of the type which may be asserted against a person entitled to enforce a negotiable instrument under section 3305(a) (relating to defenses and claims in recoupment).

(c)When subsection

(b)not applicable.-- Subsection

(b)does not apply to defenses of a type which may be asserted against a holder in due course of a negotiable instrument under section 3305(b).

(d)Omission of required statement in consumer transaction.-- In a consumer transaction, if a record evidences the account debtor's obligation, law other than this division requires that the record include a statement to the effect that the rights of an assignee are subject to claims or defenses which the account debtor could assert against the original obligee and the record does not include such a statement:

(1)the record has the same effect as if the record included such a statement; and

(2)the account debtor may assert against an assignee those claims and defenses which would have been available if the record included such a statement.

(e)Rule for individual under other law.-- This section is subject to law other than this division 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.

(f)Other law not displaced.-- Except as otherwise provided in subsection (d), this section does not displace law other than this division which gives effect to an agreement by an account debtor not to assert a claim or defense against an assignee.

13c9404s