810 ILCS 5/9-406
2021 Illinois Compiled Statutes|Chapter 810 - COMMERCIAL CODE|810 ILCS 5/ - Uniform Commercial Code.|Article 9 - Secured Transactions

 (from Ch. 26, par. 9-406)Sec. 9-406. 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.(a) Discharge of account debtor; effect of notification.  Subject to  subsections (b) through (i), an account debtor on an account, chattel paper, or  a  payment intangible may discharge its obligation by paying the assignor until,  but  not after, the account debtor receives a notification, authenticated by the  assignor or  the assignee, that the amount due or to become due has been assigned and that  payment is to be made to the assignee.  After receipt of the notification, the  account  debtor may discharge its obligation by paying the assignee and may not  discharge  the obligation by paying the assignor.(b) When notification ineffective.  Subject to subsection (h),  notification is ineffective under subsection (a):(1) if it does not reasonably identify the rights     assigned;(2) to the extent that an agreement between an     account debtor and a seller of a payment intangible limits the account debtor's duty to pay a person other than the seller and the limitation is effective under law other than this Article; or(3) at the option of an account debtor, if the     notification notifies the account debtor to make less than the full amount of any installment or other periodic payment to the assignee, even if:(A) only a portion of the account, chattel paper,         or payment intangible has been assigned to that assignee;(B) a portion has been assigned to another         assignee; or(C) the account debtor knows that the assignment         to that assignee is limited.(c) Proof of assignment.  Subject to subsection (h), if requested by  the account debtor, an assignee shall seasonably furnish reasonable proof that  the  assignment has been made.  Unless the assignee complies, the account debtor may  discharge its obligation by paying the assignor, even if the account debtor has  received a notification under subsection (a).(d) Term restricting assignment generally ineffective.  Except as  otherwise provided in subsection (e) and Sections 2A-303 and 9-407, and subject  to  subsection (h), a term in an agreement between an account debtor and an  assignor  or in a promissory note is ineffective to the extent that it:(1) prohibits, restricts, or requires the consent of     the account debtor or person obligated on the promissory note to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in, the account, chattel paper, payment intangible, or promissory note; or(2) provides that the assignment or transfer or the     creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account, chattel paper, payment intangible, or promissory note.(e) Inapplicability of subsection (d) to certain sales.  Subsection  (d) does not apply to the sale of a 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.(f) Legal restrictions on assignment generally ineffective.  Except as otherwise provided in Sections 2A-303 and 9-407 and subject to  subsections (h) and (i), a rule of law, statute, or regulation that prohibits, restricts,  or requires the consent of a government, governmental body or official, or account  debtor to the assignment or transfer of, or creation of a security interest in, an  account or chattel paper is ineffective to the extent that the rule of law, statute, or  regulation:(1) prohibits, restricts, or requires the consent of     the government, governmental body or official, or account debtor to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in the account or chattel paper; or(2) provides that the assignment or transfer or the     creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account or chattel paper.(g) Subsection (b)(3) not waivable.  Subject to subsection (h), an  account debtor may not waive or vary its option under subsection (b)(3).(h) Rule for individual under other law.  This Section is subject  to law other than this Article which establishes a different rule for an  account  debtor who is an individual and who incurred the obligation primarily for  personal,  family, or household purposes.(i) Inapplicability to health-care-insurance receivable.  This  Section does not apply to an assignment of a health-care-insurance  receivable.  (Source: P.A. 97-1034, eff. 7-1-13.)