2016 Kentucky Revised Statutes CHAPTER 355 - UNIFORM COMMERCIAL CODE Article 9 - Secured Transactions -- Sales of Accounts, Contract Rights, and Chattel Paper 355.9-404 Rights acquired by assignee -- Claims and defenses against assignee.
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355.9-404 Rights acquired by assignee -- Claims and defenses against assignee.
(1)
(2)
(3)
(4)
(5)
Unless an account debtor has made an enforceable agreement not to assert defenses
or claims, and subject to subsections (2) to (5) of this section, the rights of an
assignee are subject to:
(a) All terms of the agreement between the account debtor and assignor and any
defense or claim in recoupment arising from the transaction that gave rise to
the contract; and
(b) Any other defense or claim of the account debtor against the assignor which
accrues before the account debtor receives a notification of the assignment
authenticated by the assignor or the assignee.
Subject to subsection (3) of this section and except as otherwise provided in
subsection (4) of this section, the claim of an account debtor against an assignor
may be asserted against an assignee under subsection (1) of this section only to
reduce the amount the account debtor owes.
This section is subject to law other than this article 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.
In a consumer transaction, if a record evidences the account debtor's obligation, law
other than this article requires that the record include a statement to the effect that
the account debtor's recovery against an assignee with respect to claims and
defenses against the assignor may not exceed amounts paid by the account debtor
under the record, and the record does not include such a statement, the extent to
which a claim of an account debtor against the assignor may be asserted against an
assignee is determined as if the record included such a statement.
This section does not apply to an assignment of a health-care-insurance receivable.
Effective: July 1, 2001
History: Repealed and reenacted 2000 Ky. Acts ch. 408, sec. 86, effective July 1, 2001.
-- Amended 1998 Ky. Acts ch. 542, sec. 6, effective July 15, 1998. -- Amended 1986
Ky. Acts ch. 118, sec. 77, effective July 1, 1987; and ch. 204, sec. 9, effective July
15, 1986. -- Amended 1966 Ky. Acts ch. 83, sec. 3; and ch. 185, sec. 2. -- Amended
1962 Ky. Acts ch. 83, sec. 12. -- Created 1958 Ky. Acts ch. 77, sec. 9-404.
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