2000 Minnesota Statutes

     336.9-318 No interest retained in right to payment that 
  is sold; rights and title of seller of account or chattel paper 
  with respect to creditors and purchasers. 

    (a)    Seller retains no interest.  A debtor that has 
 sold an account, chattel paper, payment intangible, or 
 promissory note does not retain a legal or equitable interest in 
 the collateral sold. 

    (b)    Deemed rights of debtor if buyer's security 
 interest unperfected.  For purposes of determining the rights 
 of creditors of, and purchasers for value of an account or 
 chattel paper from, a debtor that has sold an account or chattel 
 paper, while the buyer's security interest is unperfected, the 
 debtor is deemed to have rights and title to the account or 
 chattel paper identical to those the debtor sold. 

    HIST: 2000 c 399 art 1 s 38 

*   NOTE:  This section, as added by Laws 2000, chapter 399, 
*article 1, section 38, is effective July 1, 2001.  Laws 2000, 
*chapter 399, article 1, section 130. 

*   NOTE:  Minnesota Statutes 1998, section 336.9-318, which 
*reads as follows, is repealed July 1, 2001.  Laws 2000, chapter 
*399, article 1, section 130. 

*   "336.9-318 Defenses against assignee; modification of 
*contract after notification of assignment; term prohibiting 
*assignment ineffective; identification and proof of assignment. 

*   (1) Unless an account debtor has made an enforceable 
*agreement not to assert defenses or claims arising out of a sale 
*as provided in section 336.9-206 the rights of an assignee are 
*subject to 

*   (a) all the terms of the contract between the account 
*debtor and the assignor and any defense or claim arising 
*therefrom; and 

*   (b) any other defense or claim of the account debtor 
*against the assignor which accrues before the account debtor 
*receives notification of the assignment. 

*   (2) So far as the right to payment or a part thereof under 
*an assigned contract has not be fully earned by performance and 
*notwithstanding notification of the assignment any modification 
*of or substitution for the contract made in good faith and in 
*accordance with reasonable commercial standards is effective 
*against an assignee unless the account debtor has otherwise 
*agreed but the assignee acquires corresponding rights under the 
*modified or substituted contract.  The assignment may provide 
*that such modification or substitution is a breach by the 
*assignor. 

*   (3) The account debtor is authorized to pay the assignor 
*until the account debtor receives notification that the amount 
*due or to become due has been assigned and that payment is to be 
*made to the assignee.  A notification which does not reasonably 
*identify the rights assigned is ineffective. If requested by the 
*account debtor, the assignee must seasonably furnish reasonable 
*proof that the assignment has been made and unless the assignee 
*does so the account debtor may pay the assignor. 

*   (4) A term in any contract between an account debtor and an 
*assignor is ineffective if it prohibits assignment of an account 
*or prohibits creation of a security interest in a general 
*intangible for money due or to become due or requires the 
*account debtor's consent to such assignment or security 
*interest."