KRS 355.9-403: Agreement not to assert defenses against assignee.

(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; and

(d) Without notice of a defense or claim i n 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 ar e 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 m ay 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 in dividual 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.