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Can you summarize MNST 336.9-406?
UNIFORM COMMERCIAL CODE > DISCHARGE OF ACCOUNT DEBTOR; NOTIFICATION OF ASSIGNMENT; IDENTIFICATION AND PROOF OF ASSIGNMENT; RESTRICTIONS ON ASSIGNMENT OF ACCOUNTS, CHATTEL PAPER, PAYMENT INTANGIBLES, AND PROMISSORY NOTES INEFFECTIVE.
Short Summary
This section of the Minnesota Statutes, under the Trade Regulations and Consumer Protection section of the Uniform Commercial Code, governs the discharge of account debtors, notification of assignment, identification and proof of assignment, and restrictions on the assignment of accounts, chattel paper, payment intangibles, and promissory notes. It states that an account debtor may discharge its obligation by paying the assignor until they receive a notification, authenticated by the assignor or assignee, that the amount due has been assigned and payment is to be made to the assignee. The notification must reasonably identify the rights assigned, and if requested by the account debtor, the assignee must provide reasonable proof of the assignment. The section also states that terms in agreements or promissory notes that prohibit or restrict the assignment or transfer of the account, chattel paper, payment intangible, or promissory note are generally ineffective. However, there are exceptions for certain sales and legal restrictions. It is important to note that this section does not apply to the assignment of a health-care-insurance receivable.
Whom does it apply to?
Account debtors, assignors, and assignees
What does it govern?
Discharge of account debtor; notification of assignment; identification and proof of assignment; restrictions on assignment of accounts, chattel paper, payment intangibles, and promissory notes
What are exemptions?
This section does not apply to an assignment of a health-care-insurance receivable.
What are the Penalties?
No penalties mentioned.
Jurisdiction
Minnesota