Oregon Statutes 79.0408 – UCC 9-408. Restrictions on assignment of promissory notes, health-care-insurance receivables, and certain general intangibles ineffective
(1) Except as otherwise provided in subsection (2) of this section, a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health-care-insurance receivable or a general intangible, including a contract, permit, license or franchise, and which term prohibits, restricts or requires the consent of the person obligated on the promissory note or the account debtor to, the assignment or transfer of, or creation, attachment or perfection of a security interest in, the promissory note, health-care-insurance receivable or general intangible, is ineffective to the extent that the term:
Terms Used In Oregon Statutes 79.0408
- Account debtor: means a person obligated on an account, chattel paper or general intangible. See Oregon Statutes 79.0102
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Collateral: means the property subject to a security interest or agricultural lien. See Oregon Statutes 79.0102
- Contract: A legal written agreement that becomes binding when signed.
- General intangible: means any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter-of-credit rights, letters of credit, money and oil, gas or other minerals before extraction. See Oregon Statutes 79.0102
- 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 Oregon Statutes 79.0102
- 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.
- Payment intangible: means a general intangible under which the account debtor's principal obligation is a monetary obligation. See Oregon Statutes 79.0102
- Person: includes individuals, corporations, associations, firms, partnerships, limited liability companies and joint stock companies. See Oregon Statutes 174.100
- Promissory note: means an instrument that evidences a promise to pay a monetary obligation, does not evidence an order to pay, and does not contain an acknowledgment by a bank that the bank has received for deposit a sum of money or funds. See Oregon Statutes 79.0102
- Statute: A law passed by a legislature.
(a) Would impair the creation, attachment or perfection of a security interest; or
(b) Provides that the assignment or transfer or the creation, attachment or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination or remedy under the promissory note, health-care-insurance receivable or general intangible.
(2) Subsection (1) of this section applies to a security interest in a payment intangible or promissory note only if the security interest arises out of a sale of the payment intangible or promissory note, other than a sale pursuant to a disposition under ORS § 79.0610 or an acceptance of collateral under ORS § 79.0620.
(3) A rule of law, statute or regulation that prohibits, restricts or requires the consent of a government, governmental body or official, person obligated on a promissory note or account debtor to the assignment or transfer of, or creation of a security interest in, a promissory note, health-care-insurance receivable or general intangible, including a contract, permit, license or franchise between an account debtor and a debtor, is ineffective to the extent that the rule of law, statute or regulation:
(a) Would impair the creation, attachment or perfection of a security interest; or
(b) Provides that the assignment or transfer or the creation, attachment or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination or remedy under the promissory note, health-care-insurance receivable or general intangible.
(4) To the extent that a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health-care-insurance receivable or general intangible or a rule of law, statute or regulation described in subsection (3) of this section would be effective under law other than this chapter but is ineffective under subsection (1) or (3) of this section, the creation, attachment or perfection of a security interest in the promissory note, health-care-insurance receivable or general intangible:
(a) Is not enforceable against the person obligated on the promissory note or the account debtor;
(b) Does not impose a duty or obligation on the person obligated on the promissory note or the account debtor;
(c) Does not require the person obligated on the promissory note or the account debtor to recognize the security interest, pay or render performance to the secured party, or accept payment or performance from the secured party;
(d) Does not entitle the secured party to use or assign the debtor’s rights under the promissory note, health-care-insurance receivable or general intangible, including any related information or materials furnished to the debtor in the transaction giving rise to the promissory note, health-care-insurance receivable or general intangible;
(e) Does not entitle the secured party to use, assign, possess or have access to any trade secrets or confidential information of the person obligated on the promissory note or the account debtor; and
(f) Does not entitle the secured party to enforce the security interest in the promissory note, health-care-insurance receivable or general intangible.
(5)(a) Subsections (1) and (3) of this section do not apply to the assignment or transfer of, or the creation of a security interest in, a claim or right to receive compensation for injuries or sickness as described in 26 U.S.C. § 104(a)(2), provided that such transaction constitutes a sale of such claim or right. The limitation in this paragraph is intended to leave to the court the determination of the proper rules in such cases. The court may not infer from that limitation the nature of the proper rule in such cases and may continue to apply established approaches.
(b) Subsections (1) and (3) of this section do not apply to the following:
(A) The assignment or transfer of, or the creation of a security interest in, a claim or right to receive compensation for injuries or sickness as described in 26 U.S.C. § 104(a)(1);
(B) The assignment or transfer of, or the creation of a security interest in, a claim or right to receive benefits under a special needs trust as described in 42 U.S.C. § 1396p(d)(4); or
(C) The assignment or transfer of, or the creation, attachment, perfection or enforcement of a security interest in, the benefits, rights, privileges or options accruing under an annuity policy, to the extent that the annuity policy provides for such a restriction and the restriction is permitted under ORS § 743.049.
(c) Subsection (3) of this section does not apply to the assignment or transfer of, or the creation, attachment, perfection or enforcement of a security interest in, a right when the transfer of the right is prohibited or restricted by ORS § 147.325, 461.250 (8) or 656.234, to the extent that ORS § 147.325, 461.250 (8) or 656.234 is inconsistent with subsection (3) of this section.
(6) Except to the extent otherwise provided in subsection (5) of this section, this section prevails over any inconsistent provision of an existing or future statute unless the provision refers expressly to this section and states that the provision prevails over this section. [2001 c.445 § 70; 2003 c.58 § 5; 2012 c.12 § 11]