2006 Minnesota Code
Chapters 324 - 338 Trade Regulations, Consumer Protection
Chapter 336 Uniform Commercial Code
Section 336.9-408 RESTRICTIONS ON ASSIGNMENT OF PROMISSORY NOTES, HEALTH-CARE-INSURANCE RECEIVABLES, AND CERTAIN GENERAL INTANGIBLES INEFFECTIVE.

336.9-408 MS 1974 [Repealed, 1976 c 135 s 38]
336.9-408 MS 1998 [Repealed, 2000 c 399 art 1 s 140]
336.9-408 RESTRICTIONS ON ASSIGNMENT OF PROMISSORY NOTES,
HEALTH-CARE-INSURANCE RECEIVABLES, AND CERTAIN GENERAL
INTANGIBLES INEFFECTIVE.
(a) Term restricting assignment generally ineffective. Except as otherwise provided in
subsection (b), 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:
(1) would impair the creation, attachment, or perfection of a security interest; or
(2) provides that the assignment or transfer or the 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.
(b) Applicability of subsection (a) to sales of certain rights to payment. Subsection (a)
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.
(c) Legal restrictions on assignment generally ineffective. 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:
(1) would impair the creation, attachment, or perfection of a security interest; or
(2) provides that the assignment or transfer or the 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.
(d) Limitation on ineffectiveness under subsections (a) and (c). 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 (c) would be effective under law other than this article but is ineffective
under subsection (a) or (c), the creation, attachment, or perfection of a security interest in the
promissory note, health-care-insurance receivable, or general intangible:
(1) is not enforceable against the person obligated on the promissory note or the account
debtor;
(2) does not impose a duty or obligation on the person obligated on the promissory note or
the account debtor;
(3) 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;
(4) 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;
(5) 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
(6) does not entitle the secured party to enforce the security interest in the promissory note,
health-care-insurance receivable, or general intangible.
History: 2000 c 399 art 1 s 70