N.Y. Uniform Commercial Code Law § 9-404: Rights Acquired by Assignee; Claims and Defenses Against Assignee

Section 9--404. Rights Acquired by Assignee; Claims and Defenses Against

Assignee.

(a) Assignee's rights subject to terms, claims, and defenses;

exceptions. Unless an account debtor has made an enforceable agreement

not to assert defenses or claims, and subject to subsections (b) through

(e), the rights of an assignee are subject to:

(1) all terms of the agreement between the account debtor and

assignor and any defense or claim in recoupment arising from

the transaction that gave rise to the contract; and

(2) any other defense or claim of the account debtor against the

assignor which accrues before the account debtor receives a

notification of the assignment signed by the assignor or the

assignee.

(b) Account debtor's claim reduces amount owed to assignee. Subject to

subsection (c) and except as otherwise provided in subsection (d), the

claim of an account debtor against an assignor may be asserted against

an assignee under subsection (a) only to reduce the amount the account

debtor owes.

(c) Rule for individual under other law. 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.

(d) Omission of required statement in consumer transaction. 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 account debtor's recovery against an

assignee with respect to claims and defenses against the assignor may

not exceed amounts paid by the account debtor under the record, and the

record does not include such a statement, the extent to which a claim of

an account debtor against the assignor may be asserted against an

assignee is determined as if the record included such a statement.

(e) Inapplicability to health-care-insurance receivable. This section

does not apply to an assignment of a health-care-insurance receivable.