South Carolina § 36-9-403 Agreement not to assert defenses against assignee.

South Carolina Statutes

§ 36-9-403 — Agreement not to assert defenses against assignee.

South Carolina·Title 36 COMMERCIAL CODE·Ch. 9 COMMERCIAL CODE—SECURED TRANSACTIONS

(a)In this section, "value" has the meaning provided in Section 36-3-303.

(b)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 that 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 that may be asserted against a person entitled to enforce a negotiable instrument under Section 36-3-305(2).

(c)Subsection (b) does not apply to defenses of a type that may be asserted against a holder in due course of a negotiable instrument under Section 36

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(a) In this section, "value" has the meaning provided in Section 36-3-303. (b) 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 that 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 that may be asserted against a person entitled to enforce a negotiable instrument under Section 36-3-305(2). (c) Subsection (b) does not apply to defenses of a type that may be asserted against a holder in due course of a negotiable instrument under Section 36-3-305(2)(a)-(e). (d) In a consumer transaction, if a record evidences the account debtor's obligation, law other than this chapter requires that the record include a statement to the effect that the rights of an assignee are subject to claims or defenses that 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 that would have been available if the record included such a statement. (e) This section is subject to law other than this chapter 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) Except as otherwise provided in subsection (d), this section does not displace law other than this chapter which gives effect to an agreement by an account debtor not to assert a claim or defense against an assignee.

South Carolina § 36-9-403 (Agreement not to assert defenses against assignee.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Legislative History

HISTORY: 1962 Code SECTION 10.9-403; 1966 (54) 2716; 1967 (55) 862; 1968 (55) 3037; 1978 Act No. 644, Part II, SECTION 7; 1985 Act No. 201, Part II, SECTION 7A; 1988 Act No. 494, SECTION 5; 2001 Act No. 67, SECTION 12.