(a)Except as otherwise provided in
subsections (b) and (f), a term in a promissory note or in an agreement
between an account debtor and a debtor that 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, transfer, creation, attachment, or
perfection of the
Free access — add to your briefcase to read the full text and ask questions with AI
(a) Except as otherwise provided in
subsections (b) and (f), a term in a promissory note or in an agreement
between an account debtor and a debtor that 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, 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.
(b) 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 other than a sale
under a disposition under IC 26-1-9.1-610 or an acceptance of
collateral under IC 26-1-9.1-620.
(c) Except as provided in subsection (f), a rule of law, statute, or
regulation, which 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, 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.
(d) 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 IC 26-1-9.1 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.
(e) This section prevails over any inconsistent provision in statute,
administrative rule, or regulation.
(f) This section does not apply to a security interest in an ownership
interest in a general partnership, limited partnership, or limited liability
company.
(g) As used in this section, "promissory note" includes a negotiable
instrument that evidences chattel paper.