(1) In this section, “value” has the meaning provided in KRS 355. 3-303(1).
(2) Except as otherwise provided in this section, an agreement between an account
debtor and an assignor not to assert against an assignee any claim or defense that
the account debtor may have against the assignor is enforceable by an assignee that
takes an assignment:
(a) For value;
(b) In good faith;
(c) Without notice of a claim of a property or possessory right to the property assigned;
(d) Without notice of a defense or claim in recoupment of the type that may be asserted
against a person entitled to enforce a negotiable instrument under KRS 355.3-305(1).
(3) Subsection (2) of this section does not apply to defenses of a type that may
be asserted against a holder in due course of a negotiable instrument under KRS 355.3-305(2).
(4) In a consumer transaction, if a record evidences the account debtor's obligation,
law other than this article requires that the record include a statement to the effect
that the rights of an assignee are subject to claims or defenses that the account
debtor could assert against the original obligee, and the record does not include
such a statement:
(a) The record has the same effect as if the record included such a statement; and
(b) The account debtor may assert against an assignee those claims and defenses that
would have been available if the record included such a statement.
(5) 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.
(6) Except as otherwise provided in subsection (4) of this section, this section
does not displace law other than this article which gives effect to an agreement by
an account debtor not to assert a claim or defense against an assignee.
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