Arizona Laws 47-9405. Modification of assigned contract
A. 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 B, C and D of this section.
Terms Used In Arizona Laws 47-9405
- Account debtor: means a person obligated on an account, chattel paper or general intangible but does not include persons obligated to pay a negotiable instrument, even if the instrument constitutes part of chattel paper. See Arizona Laws 47-9102
- Contract: A legal written agreement that becomes binding when signed.
- 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 Arizona Laws 47-9102
- Good faith: means honesty in fact and the observance of reasonable commercial standards of fair dealing. See Arizona Laws 47-9102
- Health-care-insurance receivable: means an interest in or claim under a policy of insurance that is a right to payment of a monetary obligation for health care goods or services provided. See Arizona Laws 47-9102
- 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.
B. Subsection A of this section applies to the extent that:
1. The right to payment or a part thereof under an assigned contract has not been fully earned by performance; or
2. 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 47-9406, subsection A.
C. 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.
D. This section does not apply to an assignment of a health-care-insurance receivable.