810 ILCS 5/9-408
2021 Illinois Compiled Statutes|Chapter 810 - COMMERCIAL CODE|810 ILCS 5/ - Uniform Commercial Code.|Article 9 - Secured Transactions

 (from Ch. 26, par. 9-408)Sec. 9-408. Restrictions on assignment of promissory notes,  health-care-insurance receivables, and certain general intangibles ineffective.(a) Term restricting assignment generally ineffective.  Except as  otherwise provided in subsection (b), 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:(1) would impair the creation, attachment, or     perfection of a security interest; or(2) 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.(b) Applicability of subsection (a) to sales of certain rights to payment.  Subsection (a) 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 Section 9-610 or an acceptance of collateral under Section 9-620.(c) Legal restrictions on assignment generally ineffective.  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:(1) would impair the creation, attachment, or     perfection of a security interest; or(2) 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.(d) Limitation on ineffectiveness under subsections (a) and (c).  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 (c) would be effective under law other than this Article but is  ineffective under subsection (a) or (c), the creation, attachment, or  perfection of a security interest in the promissory note, health-care-insurance  receivable, or general intangible:(1) is not enforceable against the person obligated     on the promissory note or the account debtor;(2) does not impose a duty or obligation on the     person obligated on the promissory note or the account debtor;(3) 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;(4) 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;(5) 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(6) does not entitle the secured party to enforce the     security interest in the promissory note, health-care-insurance receivable, or general intangible. (Source: P.A. 97-1034, eff. 7-1-13.)