Document ID: chunk:federal_register_of_legislation:C2024C00719:section:81
Version: federal_register_of_legislation:C2024C00719
Segment Type: section
Provision Reference: s 81
Character Range: 179482–180717

81  Rights on transfer of account or chattel paper—contractual restrictions and prohibitions on transfer

Scope
 (1) This section applies to a term in a contract if:
 (a) the contract is between an account debtor and a transferor; and
 (b) the term restricts or prohibits transfer of any of the following for currency due or to become due:
 (i) the whole of an account that is the proceeds of inventory;
 (ii) the whole of an account that arises from granting a right (other than a right granted under a construction contract), or providing services (other than financial services), in the ordinary course of a business of granting rights or providing services of that kind (whether or not the account debtor is the person to whom the right is granted or the services are provided);
 (iii) the whole of an account that is the proceeds of an account mentioned in subparagraph (ii);
 (iv) chattel paper.

Statutory restriction on contracts
 (2) The term in the contract:
 (a) is binding on the transferor, but only to the extent of making the transferor liable in damages for breach of contract; and
 (b) is unenforceable against third parties.

Chapter 3—Specific rules for certain security interests

Part 3.1—Guide to this Chapter