Ohio Code 1309.403 – Agreement not to assert defenses against assignee – UCC 9-403
(A) As used in this section, “value” has the same meaning as in division (A) of section 1303.33 of the Revised Code.
Terms Used In Ohio Code 1309.403
- Account: includes health-care insurance receivables. See Ohio Code 1309.102
- Account debtor: means a person who is obligated on an account, chattel paper, or general intangible. See Ohio Code 1309.102
- Consumer transaction: means a transaction in which: (a) an individual incurs an obligation primarily for personal, family, or household purposes, (b) a security interest secures the obligation, and (c) the collateral is held or acquired primarily for personal, family, or household purposes. See Ohio Code 1309.102
- Debtor: means :
(a) A person having an interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor;
(b) A seller of accounts, chattel paper, payment intangibles, or promissory notes; or
(c) A consignee. See Ohio Code 1309.102
- Instrument: means a negotiable instrument or any other writing that evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease, and is of a type that in ordinary course of business is transferred by delivery with any necessary indorsement or assignment. See Ohio Code 1309.102
- 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: includes an individual, corporation, business trust, estate, trust, partnership, and association. See Ohio Code 1.59
- Property: means real and personal property. See Ohio Code 1.59
- Rule: includes regulation. See Ohio Code 1.59
(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 division (A) of section 1303.35 of the Revised Code.
(C) Division (B) of this section does not apply to defenses of a type that may be asserted against a holder in due course of a negotiable instrument under division (B) of section 1303.34 of the Revised Code.
(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 the required statement:
(1) The record has the same effect as if the record included the required statement; and
(2) The account debtor may assert against an assignee those claims and defenses that would have been available if the record included the required statement.
(E) This section is subject to law other than this chapter that 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 division (D) of this section, this section does not displace law other than this chapter that gives effect to an agreement by an account debtor not to assert a claim or defense against an assignee.