(a) A modification of or substitution for an assigned contract is effective against an assignee if made in good faith. The assignee acquires corresponding rights under the modified or substituted contract. The assignment may provide that the modification or substitution is a breach of contract by the assignor. This subsection is subject to subsections (b) through (d).
(b) Subsection (a) applies to the extent that:
(1) the right to payment or a part thereof under an assigned contract has not been fully earned by performance; or
(2) the right to payment or a part thereof has been fully earned by performance and the account debtor has not received notification of the assignment under Section 36-9-406(a).
(c) This section is subject to law other than this chapter 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.
(d) This section does not apply to an assignment of a health-care-insurance receivable.
HISTORY: 1962 Code Section 10.9-405; 1966 (54) 2716; 1967 (55) 605; 1978 Act No. 644, Part II, Section 7; 1985 Act No. 201, Part II, Sections 7C, 7D; 1988 Act No. 494, Section 5; 2001 Act No. 67, Section 12.