Michigan Laws 440.9405 – Modification of assigned contract
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(1) 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 is subject to subsections (2) through (4).
(2) Subsection (1) applies to the extent that the right to payment or a part thereof under an assigned contract has not been fully earned by performance, or to the extent that 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 9406(1).
Terms Used In Michigan Laws 440.9405
- Account debtor: means a person obligated on an account, chattel paper, or general intangible. See Michigan Laws 440.9102
- Contract: A legal written agreement that becomes binding when signed.
- Debtor: means 1 of the following:
(i) A person having an interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor. See Michigan Laws 440.9102Good faith: except as otherwise provided in article 5, means honesty in fact and the observance of reasonable commercial standards of fair dealing. See Michigan Laws 440.1201 Health-care-insurance receivable: means an interest in or claim under a policy of insurance which is a right to payment of a monetary obligation for health-care goods or services provided. See Michigan Laws 440.9102 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. Right: includes remedy. See Michigan Laws 440.1201
(3) This section is subject to law other than this article 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.
(4) This section does not apply to an assignment of a health-care-insurance receivable.