§ 25-9-405. Modification of assigned contract. - North Carolina Statutes

§25‑9‑405.  Modification of assigned contract.

(a)        Effect ofmodification on assignee. – A modification of or substitution for an assignedcontract is effective against an assignee if made in good faith. The assigneeacquires corresponding rights under the modified or substituted contract. Theassignment may provide that the modification or substitution is a breach ofcontract by the assignor. This subsection is subject to subsections (b) through(d) of this section.

(b)        Applicability ofsubsection (a). – Subsection (a) of this section applies to the extent that:

(1)        The right to paymentor a part thereof under an assigned contract has not been fully earned byperformance; or

(2)        The right to paymentor a part thereof has been fully earned by performance and the account debtorhas not received notification of the assignment under G.S. 25‑9‑406(a).

(c)        Rule for individualunder other law. – This section is subject to law other than this Article whichestablishes a different rule for an account debtor who is an individual and whoincurred the obligation primarily for personal, family, or household purposes.

(d)        Inapplicability tohealth‑care‑insurance receivable. – This section does not apply toan assignment of a health‑care‑insurance receivable. (1945,c. 196, s. 6; 1961, c. 574; 1965, c. 700, s. 1; 1975, c. 862, s. 7; 2000‑169,s. 1.)