Does a no-assignment clause block assignment of our right to receive payment (accounts, chattel paper, payment intangibles, promissory notes, or other general intangibles) under Alaska law?
Mostly no, but the override is written as an exception to four other provisions rather than as a flat rule. "Except as otherwise provided in (e) of this section, AS 45.29.407, and AS 45.12.303, and subject to (h) of this section," a contract term 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" (AS 45.29.406(d)(1)). Recasting the prohibition as a consequence does not help: paragraph (d)(2) kills a term "that the assignment, transfer, 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 same asset. Alaska Statute 45.29.408(a), again "[e]xcept as otherwise provided in (b) of this section," extends the same ineffectiveness to a broader category ("a term in a promissory note or in an agreement between an account debtor and a debtor that relates to a health care insurance receivable or a general intangible, including a contract, permit, license, or franchise"), to the extent the term "(1) would impair the creation, attachment, or perfection of a security interest" or (2) makes the transfer a default or termination event.
The trap
Both overrides have real limits a drafter can still use. AS 45.29.406(h) preserves a DIFFERENT rule for an account debtor who is an individual who incurred the obligation primarily for personal, family, or household purposes: the override in (d) is not a consumer-protection rule and doesn't reach consumer account debtors the same way. AS 45.29.406(e) carves (d) out entirely for a SALE of a payment intangible or promissory note (other than a disposition under AS 45.29.610 or acceptance of collateral under AS 45.29.620), so a no-assignment clause can still be effective against certain outright sales of those asset types. AS 45.29.406(i) takes a health-care-insurance receivable out of section 406 altogether, so a receivable of that kind is reached only through 408, if at all. And (d) is expressly subject to AS 45.29.407 (assignment of a lessor's rights) and AS 45.12.303 (alienability of a lease interest), neither of which was read for this rule, so a lease-side anti-assignment term needs those sections checked directly rather than answered from 406. AS 45.29.408(b) is narrower still: its override of promissory-note and general-intangible anti-assignment terms applies "only if the security interest arises out of a sale" of the payment intangible or promissory note: an anti-assignment clause aimed at some other kind of transfer of a general intangible (for example, an ordinary contract-rights assignment that is not the sale of a payment intangible) is not shown by this text to be overridden by 408 at all.
6 authorities
- statuteAS 45.29.406enactment date not established
The words that state the rule
Except as otherwise provided in (e) of this section, AS 45.29.407 , and AS 45.12.303 , and subject to (h) of this section, 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, transfer, 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.
- statuteAS 45.29.406enactment date not established
The words that state the rule
The provisions of (d) of this section do not apply to the sale of a payment intangible or promissory note, other than a sale under a disposition under AS 45.29.610 or an acceptance of collateral under AS 45.29.620 .
- statuteAS 45.29.406enactment date not established
The words that state the rule
This section is subject to law other than this chapter that establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.
- statuteAS 45.29.406enactment date not established
The words that state the rule
This section does not apply to an assignment of a health care insurance receivable.
- statuteAS 45.29.408enactment date not established
The words that state the rule
Except as otherwise provided in (b) of this section, a term in a promissory note or in an agreement between an account debtor and a debtor that relates to a health care insurance receivable or a general intangible, including a contract, permit, license, or franchise, and that 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, transfer, 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.
- statuteAS 45.29.408enactment date not established
The words that state the rule
The provisions of (a) of this section apply 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 under a disposition under AS 45.29.610 or an acceptance of collateral under AS 45.29.620 .
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.