§ 4-9-405 — Modification of assigned contract

(a) 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 (a) is subject to
subsections (b) to (d) of this section.

(b) Subsection (a) of this section applies to the extent that:

(1) The right to payment or a part thereof under an assigned contract has not
been fully earned by performance; or

(2) 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 section 4-9-406 (a).

(c) 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.

(d) This section does not apply to an assignment of a health-care-insurance
receivable.

Legislative History

Source: L. 2001: Entire article R&RE, p. 1373, � 1, effective July 1.