Document ID: chunk:federal_register_of_legislation:C2024C00719:section:78
Version: federal_register_of_legislation:C2024C00719
Segment Type: section
Provision Reference: s 78
Character Range: 174094–175237

78  Guide to this Part

      This Part deals with the transfer of interests in collateral.
      Collateral may be transferred despite a contrary provision in a security agreement (or a provision declaring the transfer to be a default), if the grantor and transferee consent, or by the operation of law.
      The rights of a transferee of an account or chattel paper are subject to the contract between the account debtor and the transferor, and certain general law claims the account debtor may have against the transferor.
      A modification of the contract (or a substituted contract) between the account debtor and the transferor is effective against the transferee except in certain situations (dishonesty, commercial unreasonableness or adverse effects on the transferee's rights or the transferor's ability to perform the contract).
      A term in a contract between an account debtor and a transferor that imposes certain restrictions on the transfer of an account or chattel paper binds the transferor to the extent of making the transferor liable in damages for breach of contract, but is unenforceable against third parties.