Kansas Statutes
Article 9 - Secured Transactions
84-9-408 Restrictions on assignment of promissory notes, health-care-insurance receivables, and certain general intangibles ineffective.

84-9-408. Restrictions on assignment of promissory notes, health-care-insurance receivables, and certain general intangibles ineffective. (a) Term restricting assignment generally ineffective. Except as otherwise provided in K.S.A. 17-76,134(b) and (g), and amendments thereto, a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health-care-insurance receivable or a general intangible, including a contract, permit, license, or franchise, and which term prohibits, restricts, or requires the consent of the person obligated on the promissory note or the account debtor to, the assignment or transfer of, or creation, attachment, or perfection of a security interest in, the promissory note, health-care-insurance receivable, or general intangible, is ineffective to the extent that the term:
(1) Would impair the creation, attachment, or perfection of a security interest; or
(2) provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the promissory note, health-care-insurance receivable, or general intangible.
(b) Applicability of subsection (a) to sales of certain rights to payment. Subsection (a) applies to a security interest in a payment intangible or promissory note only if the security interest arises out of a sale of the payment intangible or promissory note, other than a sale pursuant to a disposition under K.S.A. 2021 Supp. 84-9-610, and amendments thereto, or an acceptance of collateral under K.S.A. 2021 Supp. 84-9-620, and amendments thereto.
(c) Legal restrictions on assignment generally ineffective. Except as otherwise provided in K.S.A. 17-76,134(g), and amendments thereto, a rule of law, statute, or regulation that prohibits, restricts, or requires the consent of a government, governmental body or official, person obligated on a promissory note, or account debtor to the assignment or transfer of, or creation of a security interest in, a promissory note, health-care-insurance receivable, or general intangible, including a contract, permit, license, or franchise between an account debtor and a debtor, is ineffective to the extent that the rule of law, statute, or regulation:
(1) Would impair the creation, attachment, or perfection of a security interest; or
(2) provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the promissory note, health-care-insurance receivable, or general intangible.
(d) Limitation on ineffectiveness under subsections (a) and (c). To the extent that a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health-care-insurance receivable or general intangible or a rule of law, statute, or regulation described in subsection (c) would be effective under law other than this article but is ineffective under subsection (a) or (c), the creation, attachment, or perfection of a security interest in the promissory note, health-care-insurance receivable, or general intangible:
(1) Is not enforceable against the person obligated on the promissory note or the account debtor;
(2) does not impose a duty or obligation on the person obligated on the promissory note or the account debtor;
(3) does not require the person obligated on the promissory note or the account debtor to recognize the security interest, pay or render performance to the secured party, or accept payment or performance from the secured party;
(4) does not entitle the secured party to use or assign the debtor's rights under the promissory note, health-care-insurance receivable, or general intangible, including any related information or materials furnished to the debtor in the transaction giving rise to the promissory note, health-care-insurance receivable, or general intangible;
(5) does not entitle the secured party to use, assign, possess, or have access to any trade secrets or confidential information of the person obligated on the promissory note or the account debtor; and
(6) does not entitle the secured party to enforce the security interest in the promissory note, health-care-insurance receivable, or general intangible.
(e) Section prevails over specified inconsistent law. This section prevails over any inconsistent provisions of any laws, rules, and regulations of this state.
History: L. 2000, ch. 142, § 70; L. 2012, ch. 84, § 9; L. 2014, ch. 40, § 67; L. 2016, ch. 62, § 2; May 19.
Revisor's Note:
Former section 84-9-408 was repealed by L. 2000, ch. 142, § 155 and the number reassigned to the current text.

Structure Kansas Statutes

Kansas Statutes

Chapter 84 - Uniform Commercial Code

Article 9 - Secured Transactions

84-9-101 Short title.

84-9-102 Definitions and index of definitions.

84-9-103 Purchase-money security interest; application of payments; burden of establishing.

84-9-104 Control of deposit account.

84-9-105 Control of electronic chattel paper.

84-9-106 Control of investment property.

84-9-107 Control of letter-of-credit right.

84-9-108 Sufficiency of description.

84-9-109 Scope.

84-9-110 Security interests arising under Article 2 or 2a.

84-9-201 General effectiveness of security agreement.

84-9-202 Title to collateral immaterial.

84-9-203 Attachment and enforceability of security interest; proceeds; supporting obligations; formal requisites.

84-9-204 After-acquired property; future advances.

84-9-205 Use or disposition of collateral permissible.

84-9-206 Security interest arising in purchase or delivery of financial asset.

84-9-207 Rights and duties of secured party having possession or control of collateral.

84-9-208 Additional duties of secured party having control of collateral.

84-9-209 Duties of secured party if account debtor has been notified of assignment.

84-9-210 Request for accounting; request regarding list of collateral or statement of account.

84-9-301 Law governing perfection of priority of security interests.

84-9-302 Law governing perfection and priority of agricultural liens.

84-9-303 Law governing perfection and priority of security interests in goods covered by a certificate of title.

84-9-304 Law governing perfection and priority of security interests in deposit accounts.

84-9-305 Law governing perfection and priority of security interests in investment property.

84-9-306 Law governing perfection and priority of security interests in letter-of-credit rights.

84-9-307 Location of debtor, registered organization, United States, foreign bank branch or agency, or foreign air carrier.

84-9-308 When security interest or agricultural lien is perfected; continuity of perfection.

84-9-309 Security interest perfected upon attachment.

84-9-310 When filing required to perfect security interest or agricultural lien; security interests and agricultural liens to which filing provisions do not apply.

84-9-311 Perfection of security interests in property subject to other laws; duration and renewal of perfection; inapplicability to certain collateral.

84-9-312 Perfection of security interests in chattel paper, deposit accounts, documents, goods covered by documents, instruments, investment property, letter-of-credit rights, and money; perfection by permissive filing; temporary perfection without f...

84-9-313 When possession by or delivery to secured party perfects security interest without filing.

84-9-314 Perfection by control.

84-9-315 Secured party's rights on disposition of collateral and in proceeds.

84-9-316 Continued perfection of security interest following change in governing law.

84-9-317 Interests that take priority over or take free of security interest or agricultural lien.

84-9-318 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.

84-9-319 Rights and title of consignee with respect to creditors and purchasers.

84-9-320 Buyer of goods.

84-9-321 Licensee of general intangible and lessee of goods in ordinary course of business.

84-9-322 Priorities among conflicting security interests in and agricultural liens on same collateral.

84-9-323 Future advances.

84-9-324 Priority of purchase-money security interests.

84-9-325 Priority of security interests in transferred collateral.

84-9-326 Priority of security interests created by new debtor; multiple original debtors.

84-9-327 Priority of security interests in deposit account.

84-9-328 Priority of security interests in investment property.

84-9-329 Priority of security interests in letter-of-credit right.

84-9-330 Priority of purchaser of chattel paper or instrument.

84-9-331 Priority of rights of purchasers of instruments, documents, and securities under other articles; priority of interests in financial assets and security entitlements under article 8.

84-9-332 Transfer of money; transfer of funds from deposit account.

84-9-333 Priority of certain liens arising by operation of law.

84-9-334 Priority of security interests in fixtures and crops.

84-9-335 Accessions.

84-9-336 Commingled goods.

84-9-337 Priority of security interests in goods covered by certificate of title.

84-9-338 Priority of security interest or agricultural lien perfected by filed financing statement providing certain incorrect information.

84-9-339 Priority subject to subordination.

84-9-339a Security interests in proceeds from oil and gas production; perfection; priority; definition of terms.

84-9-340 Effectiveness of right of recoupment or set-off against deposit account.

84-9-341 Bank's rights and duties with respect to deposit account.

84-9-342 Bank's right to refuse to enter into or disclose existence of control agreement.

84-9-401 Alienability of debtor's rights.

84-9-402 Secured party not obligated on contract of debtor or in tort.

84-9-403 Agreement not to assert defenses against assignee.

84-9-404 Rights acquired by assignee; claims and defenses against assignee.

84-9-405 Modification of assigned contract.

84-9-406 Discharge of account debtor; notification of assignment; identification and proof of assignment; restrictions on assignment of accounts, chattel paper, payment intangibles, and promissory notes ineffective.

84-9-407 Restrictions on creation or enforcement of security interest in leasehold interest or in lessor's residual interest.

84-9-408 Restrictions on assignment of promissory notes, health-care-insurance receivables, and certain general intangibles ineffective.

84-9-409 Restrictions on assignment of letter-of-credit rights ineffective.

84-9-501 Filing office.

84-9-502 Contents of financing statement; record of mortgage as financing statement; time of filing financing statement.

84-9-503 Same; name of debtor.

84-9-504 Indication of collateral.

84-9-505 Filing and compliance with other statutes and treaties for consignments, leases, other bailments, and other transactions.

84-9-506 Effect of errors or omissions.

84-9-507 Effectiveness of financing statement; disposition of collateral; seriously misleading information; change in debtor's name.

84-9-508 Effectiveness of financing statement if new debtor becomes bound by security agreement.

84-9-509 Persons entitled to file a record.

84-9-510 Effectiveness of filed record.

84-9-511 Secured party of record.

84-9-512 Amendment of financing statement.

84-9-513 Termination statement.

84-9-514 Assignment of powers of secured party of record.

84-9-515 Duration and effectiveness of financing statement; lapse and continuation of financing statement.

84-9-516 What constitutes filing; effectiveness of filing.

84-9-517 Effect of indexing errors.

84-9-518 Filing information statements identifying inaccurate or wrongfully filed records; contents.

84-9-519 Numbering, maintaining, and indexing records; communicating information provided in records.

84-9-520 Acceptance and refusal to accept record.

84-9-521 Written initial financing statement and amendment; form.

84-9-522 Maintenance and destruction of records.

84-9-523 Information from filing office; sale or license of records.

84-9-524 Delay by filing office.

84-9-525 Fees.

84-9-526 Filing office rules.

84-9-527 Duty to report.

84-9-601 Rights after default; judicial enforcement; consignor or buyer of accounts, chattel paper, payment intangibles or promissory notes.

84-9-602 Waiver and variance of rights and duties.

84-9-603 Agreement on standards concerning rights and duties.

84-9-604 Procedure if security agreement covers real property or fixtures.

84-9-605 Unknown debtor or secondary obligor.

84-9-606 Time of default for agricultural lien.

84-9-607 Collection and enforcement by secured party.

84-9-608 Application of proceeds of collection or enforcement; liability for deficiency and right to surplus.

84-9-609 Secured party's alternatives after default; with or without judicial process; assembly of collateral.

84-9-610 Disposition of collateral after default.

84-9-611 Notification before disposition of collateral.

84-9-612 Timelines of notification before disposition of collateral.

84-9-613 Contents and form of notification before disposition of collateral; general.

84-9-614 Contents and form of notification before disposition of collateral; consumer-goods transaction.

84-9-615 Application of proceeds of disposition; liability for deficiency and right to surplus.

84-9-616 Explanation of calculation of surplus or deficiency.

84-9-617 Rights of transferee of collateral.

84-9-618 Rights and duties.

84-9-619 Transfer of record or legal title.

84-9-620 Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral.

84-9-621 Notification of proposal to accept collateral.

84-9-622 Effect of acceptance of collateral.

84-9-623 Right to redeem collateral.

84-9-624 Waiver.

84-9-625 Judicial remedies for secured party noncompliance; damages.

84-9-626 Action in which deficiency or surplus is in issue. Applicable rules if amount of deficiency or surplus in issue.

84-9-627 Determination of whether conduct was commercially reasonable.

84-9-628 Nonliability and limitation on liability of secured party.

84-9-702 Savings clause.

84-9-703 Security interest perfected before effective date.

84-9-704 Security interest unperfected before effective date.

84-9-705 Effectiveness of action taken before effective date.

84-9-706 When initial financing statement suffices to continue effectiveness of financing statement.

84-9-707 Pre-effective-date financing statement; applicable law; amendment.

84-9-708 Persons entitled to file initial financing statement or continuation statement.

84-9-709 Priority.

84-9-801 Specifying sections that are part of article 9 of the uniform act.

84-9-802 Savings clause.

84-9-803 Security interest perfected before effective date.

84-9-804 Security interest unperfected before effective date.

84-9-805 Effectiveness of action taken before effective date.

84-9-806 When initial financing statement suffices to continue effectiveness of financing statement.

84-9-807 Amendment of pre-effective date financing statement.

84-9-808 Person entitled to file initial financing statement or continuation statement.

84-9-809 Priority.