North Dakota Code 41-09-65 – (9-403) Agreement not to assert defenses against assignee
1. In this section, “value” has the meaning provided in subsection 1 of section 41-03-29.
Terms Used In North Dakota Code 41-09-65
- Debtor: means a natural person whose name was provided in a financing statement record as an individual debtor or one of the types of persons listed in section 41-09-76. See North Dakota Code 41-10-01
- Individual: means a human being. See North Dakota Code 1-01-49
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: means an individual, organization, government, political subdivision, or government agency or instrumentality. See North Dakota Code 1-01-49
- Property: includes property, real and personal. See North Dakota Code 1-01-49
- Rule: includes regulation. See North Dakota Code 1-01-49
2. 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:
a. For value; b. In good faith; c. Without notice of a claim of a property or possessory right to the property assigned; and
d. 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 subsection 1 of section 41-03-31.
3. Subsection 2 does not apply to defenses of a type that may be asserted against a holder in due course of a negotiable instrument under subsection 2 of section 41-03-31.
4. 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:
a. The record has the same effect as if the record included such a statement; and
b. The account debtor may assert against an assignee those claims and defenses that would have been available if the record included such a statement.
5. 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.
6. Except as otherwise provided in subsection 4, 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.