{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/8.9A-406.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/8.9A-406.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/8.9A-406.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/8.9A-406.html"}],"law_id":78910,"edition_id":1,"section_id":78910,"structure_id":15875,"section_number":"8.9A-406","catch_line":"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","history":"1964, c. 219, \u00a7 8.9-318; 1973, c. 509; 2000, c. 1007; 2003, c. 340; 2012, c. 155; 2024, c. 652.","full_text":"a\n\nDischarge of account debtor; effect of notification. Subject to subsections (b) through (i) and subsection (m), an account debtor on an account, chattel paper, or a payment intangible may discharge its obligation by paying the assignor until, but not after, the account debtor receives a notification, signed by the assignor or the assignee, that the amount due or to become due has been assigned and that payment is to be made to the assignee. After receipt of the notification, the account debtor may discharge its obligation by paying the assignee and may not discharge the obligation by paying the assignor.b\n\nWhen notification ineffective. Subject to subsections (h) and (m), notification is ineffective under subsection (a):1\n\nif it does not reasonably identify the rights assigned;2\n\nto the extent that an agreement between an account debtor and a seller of a payment intangible limits the account debtor’s duty to pay a person other than the seller and the limitation is effective under law other than this title; or3\n\nat the option of an account debtor, if the notification notifies the account debtor to make less than the full amount of any installment or other periodic payment to the assignee, even if:A\n\nonly a portion of the account, chattel paper, or payment intangible has been assigned to that assignee;B\n\na portion has been assigned to another assignee; orC\n\nthe account debtor knows that the assignment to that assignee is limited.c\n\nProof of assignment. Subject to subsections (h) and (m), if requested by the account debtor, an assignee shall seasonably furnish reasonable proof that the assignment has been made. Unless the assignee complies, the account debtor may discharge its obligation by paying the assignor, even if the account debtor has received a notification under subsection (a).d\n\nTerm restricting assignment generally ineffective. In this subsection, “promissory note” includes a negotiable instrument that evidences chattel paper. Except as otherwise provided in subsection (e) and \u00a7\u00a7 8.2A-303 and 8.9A-407, and subject to subsection (h), a term in an agreement between an account debtor and an assignor or in a promissory note is ineffective to the extent that it:1\n\nprohibits, restricts, or requires the consent of the account debtor or person obligated on the promissory note to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in, the account, chattel paper, payment intangible, or promissory note; or2\n\nprovides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account, chattel paper, payment intangible, or promissory note.e\n\nInapplicability of subsection (d) to certain sales. Subsection (d) does not apply to the sale of a payment intangible or promissory note, other than a sale pursuant to a disposition under § 8.9A-610 or an acceptance of collateral under § 8.9A-620.f\n\nLegal restrictions on assignment generally ineffective. Except as otherwise provided in \u00a7\u00a7 8.2A-303 and 8.9A-407 and subject to subsections (h) and (i), a rule of law, statute, or regulation that prohibits, restricts, or requires the consent of a government, governmental body or official, or account debtor to the assignment or transfer of, or creation of a security interest in, an account or chattel paper is ineffective to the extent that the rule of law, statute, or regulation:1\n\nprohibits, restricts, or requires the consent of the government, governmental body or official, or account debtor to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in the account or chattel paper; or2\n\nprovides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account or chattel paper.g\n\nSubsection (b) (3) not waivable. Subject to subsections (h) and (m), an account debtor may not waive or vary its option under subsection (b) (3).h\n\nRule for individual under other law. This section is subject to law other than this title 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.i\n\nInapplicability to health-care-insurance receivable. This section does not apply to an assignment of a health-care-insurance receivable.j\n\nInapplicability of subsection (d) to certain transactions. Subsection (d) does not apply to:1\n\na claim or right to receive compensation for injuries or sickness as described in 26 U.S.C. § 104(a) (1), as amended from time to time; or2\n\na claim or right to receive benefits under a special needs trust as described in 42 U.S.C. § 1396p (d) (4), as amended from time to time.k\n\nInapplicability to partnership and limited liability company interests. This section does not apply to an interest in a partnership or limited liability company.l\n\nNo inference regarding structured settlements. This section shall not be construed or interpreted to relieve or exempt any person or entity from any duties, obligations or rights imposed or provided by the Structured Settlement Protection Act (§ 59.1-475 et seq.), as amended from time to time.m\n\nSubsections (a), (b), (c), and (g) do not apply to a controllable account or controllable payment intangible.","order_by":null,"text":{"0":{"id":282613,"text":"Discharge of account debtor; effect of notification. Subject to subsections (b) through (i) and subsection (m), an account debtor on an account, chattel paper, or a payment intangible may discharge its obligation by paying the assignor until, but not after, the account debtor receives a notification, signed by the assignor or the assignee, that the amount due or to become due has been assigned and that payment is to be made to the assignee. After receipt of the notification, the account debtor may discharge its obligation by paying the assignee and may not discharge the obligation by paying the assignor.","type":"section","prefixes":["a"],"prefix":"a","entire_prefix":"a","prefix_anchor":"a","level":1,"next_prefix":"b"},"1":{"id":282614,"text":"When notification ineffective. Subject to subsections (h) and (m), notification is ineffective under subsection (a):","type":"section","prefixes":["b"],"prefix":"b","entire_prefix":"b","prefix_anchor":"b","level":1,"prior_prefix":"a","next_prefix":"b1"},"2":{"id":282615,"text":"if it does not reasonably identify the rights assigned;","type":"section","prefixes":["b","1"],"prefix":"1","entire_prefix":"b1","prefix_anchor":"b1","level":2,"prior_prefix":"b","next_prefix":"b2"},"3":{"id":282616,"text":"to the extent that an agreement between an account debtor and a seller of a payment intangible limits the account debtor’s duty to pay a person other than the seller and the limitation is effective under law other than this title; or","type":"section","prefixes":["b","2"],"prefix":"2","entire_prefix":"b2","prefix_anchor":"b2","level":2,"prior_prefix":"b1","next_prefix":"b3"},"4":{"id":282617,"text":"at the option of an account debtor, if the notification notifies the account debtor to make less than the full amount of any installment or other periodic payment to the assignee, even if:","type":"section","prefixes":["b","3"],"prefix":"3","entire_prefix":"b3","prefix_anchor":"b3","level":2,"prior_prefix":"b2","next_prefix":"A"},"5":{"id":282618,"text":"only a portion of the account, chattel paper, or payment intangible has been assigned to that assignee;","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"prior_prefix":"b3","next_prefix":"B"},"6":{"id":282619,"text":"a portion has been assigned to another assignee; or","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"7":{"id":282620,"text":"the account debtor knows that the assignment to that assignee is limited.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"c"},"8":{"id":282621,"text":"Proof of assignment. Subject to subsections (h) and (m), if requested by the account debtor, an assignee shall seasonably furnish reasonable proof that the assignment has been made. Unless the assignee complies, the account debtor may discharge its obligation by paying the assignor, even if the account debtor has received a notification under subsection (a).","type":"section","prefixes":["c"],"prefix":"c","entire_prefix":"c","prefix_anchor":"c","level":1,"prior_prefix":"C","next_prefix":"d"},"9":{"id":282622,"text":"Term restricting assignment generally ineffective. In this subsection, “promissory note” includes a negotiable instrument that evidences chattel paper. Except as otherwise provided in subsection (e) and \u00a7\u00a7 8.2A-303 and 8.9A-407, and subject to subsection (h), a term in an agreement between an account debtor and an assignor or in a promissory note is ineffective to the extent that it:","type":"section","prefixes":["d"],"prefix":"d","entire_prefix":"d","prefix_anchor":"d","level":1,"prior_prefix":"c","next_prefix":"d1"},"10":{"id":282623,"text":"prohibits, restricts, or requires the consent of the account debtor or person obligated on the promissory note to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in, the account, chattel paper, payment intangible, or promissory note; or","type":"section","prefixes":["d","1"],"prefix":"1","entire_prefix":"d1","prefix_anchor":"d1","level":2,"prior_prefix":"d","next_prefix":"d2"},"11":{"id":282624,"text":"provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account, chattel paper, payment intangible, or promissory note.","type":"section","prefixes":["d","2"],"prefix":"2","entire_prefix":"d2","prefix_anchor":"d2","level":2,"prior_prefix":"d1","next_prefix":"e"},"12":{"id":282625,"text":"Inapplicability of subsection (d) to certain sales. Subsection (d) does not apply to the sale of a payment intangible or promissory note, other than a sale pursuant to a disposition under § 8.9A-610 or an acceptance of collateral under § 8.9A-620.","type":"section","prefixes":["e"],"prefix":"e","entire_prefix":"e","prefix_anchor":"e","level":1,"prior_prefix":"d2","next_prefix":"f"},"13":{"id":282626,"text":"Legal restrictions on assignment generally ineffective. Except as otherwise provided in \u00a7\u00a7 8.2A-303 and 8.9A-407 and subject to subsections (h) and (i), a rule of law, statute, or regulation that prohibits, restricts, or requires the consent of a government, governmental body or official, or account debtor to the assignment or transfer of, or creation of a security interest in, an account or chattel paper is ineffective to the extent that the rule of law, statute, or regulation:","type":"section","prefixes":["f"],"prefix":"f","entire_prefix":"f","prefix_anchor":"f","level":1,"prior_prefix":"e","next_prefix":"f1"},"14":{"id":282627,"text":"prohibits, restricts, or requires the consent of the government, governmental body or official, or account debtor to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in the account or chattel paper; or","type":"section","prefixes":["f","1"],"prefix":"1","entire_prefix":"f1","prefix_anchor":"f1","level":2,"prior_prefix":"f","next_prefix":"f2"},"15":{"id":282628,"text":"provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account or chattel paper.","type":"section","prefixes":["f","2"],"prefix":"2","entire_prefix":"f2","prefix_anchor":"f2","level":2,"prior_prefix":"f1","next_prefix":"g"},"16":{"id":282629,"text":"Subsection (b) (3) not waivable. Subject to subsections (h) and (m), an account debtor may not waive or vary its option under subsection (b) (3).","type":"section","prefixes":["g"],"prefix":"g","entire_prefix":"g","prefix_anchor":"g","level":1,"prior_prefix":"f2","next_prefix":"h"},"17":{"id":282630,"text":"Rule for individual under other law. This section is subject to law other than this title 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.","type":"section","prefixes":["h"],"prefix":"h","entire_prefix":"h","prefix_anchor":"h","level":1,"prior_prefix":"g","next_prefix":"i"},"18":{"id":282631,"text":"Inapplicability to health-care-insurance receivable. This section does not apply to an assignment of a health-care-insurance receivable.","type":"section","prefixes":["i"],"prefix":"i","entire_prefix":"i","prefix_anchor":"i","level":1,"prior_prefix":"h","next_prefix":"j"},"19":{"id":282632,"text":"Inapplicability of subsection (d) to certain transactions. Subsection (d) does not apply to:","type":"section","prefixes":["j"],"prefix":"j","entire_prefix":"j","prefix_anchor":"j","level":1,"prior_prefix":"i","next_prefix":"j1"},"20":{"id":282633,"text":"a claim or right to receive compensation for injuries or sickness as described in 26 U.S.C. § 104(a) (1), as amended from time to time; or","type":"section","prefixes":["j","1"],"prefix":"1","entire_prefix":"j1","prefix_anchor":"j1","level":2,"prior_prefix":"j","next_prefix":"j2"},"21":{"id":282634,"text":"a claim or right to receive benefits under a special needs trust as described in 42 U.S.C. § 1396p (d) (4), as amended from time to time.","type":"section","prefixes":["j","2"],"prefix":"2","entire_prefix":"j2","prefix_anchor":"j2","level":2,"prior_prefix":"j1","next_prefix":"k"},"22":{"id":282635,"text":"Inapplicability to partnership and limited liability company interests. This section does not apply to an interest in a partnership or limited liability company.","type":"section","prefixes":["k"],"prefix":"k","entire_prefix":"k","prefix_anchor":"k","level":1,"prior_prefix":"j2","next_prefix":"l"},"23":{"id":282636,"text":"No inference regarding structured settlements. This section shall not be construed or interpreted to relieve or exempt any person or entity from any duties, obligations or rights imposed or provided by the Structured Settlement Protection Act (§ 59.1-475 et seq.), as amended from time to time.","type":"section","prefixes":["l"],"prefix":"l","entire_prefix":"l","prefix_anchor":"l","level":1,"prior_prefix":"k","next_prefix":"m"},"24":{"id":282637,"text":"Subsections (a), (b), (c), and (g) do not apply to a controllable account or controllable payment intangible.","type":"section","prefixes":["m"],"prefix":"m","entire_prefix":"m","prefix_anchor":"m","level":1,"prior_prefix":"l"}},"ancestry":[{"id":15875,"edition_id":1,"name":"Rights of Third Parties","identifier":"4","label":"part","depth":2,"order_by":1,"parent_id":13277,"metadata":{},"date_created":"2026-06-26 04:00:59","date_modified":"2026-06-26 04:00:59","permalink":{"id":284137,"object_type":"structure","relational_id":15875,"identifier":"4","token":"8.9A\/4","url":"\/8.9A\/4\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13277,"edition_id":1,"name":"Commercial Code \u2014 Secured Transactions","identifier":"8.9A","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:44:33","date_modified":"2026-06-26 03:44:33","permalink":{"id":283833,"object_type":"structure","relational_id":13277,"identifier":"8.9A","token":"8.9A","url":"\/8.9A\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":61383,"structure_id":15875,"section_number":"8.9A-401","catch_line":"Alienability of debtor's rights","url":"\/8.9A-401\/","token":"8.9A\/4\/8.9A-401","metadata":false},{"id":74669,"structure_id":15875,"section_number":"8.9A-402","catch_line":"Secured party not obligated on contract of debtor or in tort","url":"\/8.9A-402\/","token":"8.9A\/4\/8.9A-402","metadata":false},{"id":81896,"structure_id":15875,"section_number":"8.9A-403","catch_line":"Agreement not to assert defenses against assignee","url":"\/8.9A-403\/","token":"8.9A\/4\/8.9A-403","metadata":false},{"id":67314,"structure_id":15875,"section_number":"8.9A-404","catch_line":"Rights acquired by assignee; claims and defenses against assignee","url":"\/8.9A-404\/","token":"8.9A\/4\/8.9A-404","metadata":false},{"id":78678,"structure_id":15875,"section_number":"8.9A-405","catch_line":"Modification of assigned contract","url":"\/8.9A-405\/","token":"8.9A\/4\/8.9A-405","metadata":false},{"id":78910,"structure_id":15875,"section_number":"8.9A-406","catch_line":"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","url":"\/8.9A-406\/","token":"8.9A\/4\/8.9A-406","metadata":false},{"id":86952,"structure_id":15875,"section_number":"8.9A-407","catch_line":"Restrictions on creation or enforcement of security interest in leasehold interest or in lessor's residual interest","url":"\/8.9A-407\/","token":"8.9A\/4\/8.9A-407","metadata":false},{"id":86931,"structure_id":15875,"section_number":"8.9A-408","catch_line":"Restrictions on assignment of promissory notes, health-care-insurance receivables, and certain general intangibles ineffective","url":"\/8.9A-408\/","token":"8.9A\/4\/8.9A-408","metadata":false},{"id":75200,"structure_id":15875,"section_number":"8.9A-409","catch_line":"Restrictions on assignment of letter-of-credit rights ineffective","url":"\/8.9A-409\/","token":"8.9A\/4\/8.9A-409","metadata":false}],"previous_section":{"id":78678,"structure_id":15875,"section_number":"8.9A-405","catch_line":"Modification of assigned contract","url":"\/8.9A-405\/","token":"8.9A\/4\/8.9A-405","metadata":false},"next_section":{"id":86952,"structure_id":15875,"section_number":"8.9A-407","catch_line":"Restrictions on creation or enforcement of security interest in leasehold interest or in lessor's residual interest","url":"\/8.9A-407\/","token":"8.9A\/4\/8.9A-407","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/8.9A-406\/","history_text":"

This law was first created in 1964. The record of its establishment is cataloged in chapter 219 of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1964 \u201cActs\u201d aren\u2019t available online. It has been modified 5 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 1973, chapter 509; in 2000, chapter 1007<\/a>; in 2003, chapter 340<\/a>; in 2012, chapter 155<\/a>; in 2024, chapter 652<\/a>.<\/p>","references":[{"id":83973,"section_number":"13.1-1001.1","catch_line":"Construction","order_by":null,"url":"\/13.1-1001.1\/"},{"id":82870,"section_number":"50-73.84","catch_line":"Law governing internal relations","order_by":null,"url":"\/50-73.84\/"},{"id":68268,"section_number":"8.2-210","catch_line":"Delegation of performance; assignment of rights","order_by":null,"url":"\/8.2-210\/"},{"id":63561,"section_number":"8.9A-209","catch_line":"Duties of secured party if account debtor has been notified of assignment","order_by":null,"url":"\/8.9A-209\/"},{"id":61383,"section_number":"8.9A-401","catch_line":"Alienability of debtor's rights","order_by":null,"url":"\/8.9A-401\/"},{"id":78678,"section_number":"8.9A-405","catch_line":"Modification of assigned contract","order_by":null,"url":"\/8.9A-405\/"}],"refers_to":[{"id":77978,"section_number":"59.1-475","catch_line":"Definitions","order_by":null,"url":"\/59.1-475\/"},{"id":58906,"section_number":"8.2A-303","catch_line":"Alienability of party's interest under lease contract or of lessor's residual interest in goods; delegation of performance; transfer of rights","order_by":null,"url":"\/8.2A-303\/"},{"id":86952,"section_number":"8.9A-407","catch_line":"Restrictions on creation or enforcement of security interest in leasehold interest or in lessor's residual interest","order_by":null,"url":"\/8.9A-407\/"},{"id":83035,"section_number":"8.9A-610","catch_line":"Disposition of collateral after default","order_by":null,"url":"\/8.9A-610\/"}],"permalink":{"id":284159,"object_type":"law","relational_id":78910,"identifier":"8.9A-406","token":"8.9A\/4\/8.9A-406","url":"\/8.9A-406\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/8.9A-406\/","token":"8.9A\/4\/8.9A-406","dublin_core":{"Title":"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","Type":"Text","Format":"text\/html","Identifier":"\u00a7 8.9A-406","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

a.<\/span> Discharge of account debtor; effect of notification. Subject to subsections (b) through (i) and subsection (m), an account debtor on an account, chattel paper, or a payment intangible may discharge its obligation by paying the assignor until, but not after, the account debtor receives a notification, signed by the assignor or the assignee, that the amount due or to become due has been assigned and that payment is to be made to the assignee. After receipt of the notification, the account debtor may discharge its obligation by paying the assignee and may not discharge the obligation by paying the assignor. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

b.<\/span> When notification ineffective. Subject to subsections (h) and (m), notification is ineffective under subsection (a): <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> if it does not reasonably identify the rights assigned; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> to the extent that an agreement between an account debtor and a seller of a payment intangible limits the account debtor’s duty to pay a person other than the seller and the limitation is effective under law<\/span> other than this title; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> at the option of an account debtor, if the notification notifies the account debtor to make less than the full amount of any installment or other periodic payment to the assignee, even if: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

A.<\/span> only a portion of the account, chattel paper, or payment intangible has been assigned to that assignee; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> a portion has been assigned to another assignee; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> the account debtor knows that the assignment to that assignee is limited. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

c.<\/span> Proof of assignment. Subject to subsections (h) and (m), if requested by the account debtor, an assignee shall seasonably furnish reasonable proof that the assignment has been made. Unless the assignee complies, the account debtor may discharge its obligation by paying the assignor, even if the account debtor has received a notification under subsection (a). <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

d.<\/span> Term restricting assignment generally ineffective. In this subsection, “promissory note<\/span>” includes a negotiable instrument that evidences<\/span> chattel paper. Except as otherwise provided in subsection (e) and \u00a7\u00a7 8.2A-303<\/a> and 8.9A-407<\/a>, and subject to subsection (h), a term in an agreement between an account debtor and an assignor or in a promissory note<\/span> is ineffective to the extent that it: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> prohibits, restricts, or requires the consent of the account debtor or person obligated on the promissory note<\/span> to the assignment or transfer of, or the creation, attachment<\/span>, perfection, or enforcement of a security interest in, the account, chattel paper, payment intangible, or promissory note<\/span>; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> provides that the assignment or transfer or the creation, attachment<\/span>, perfection, or enforcement of the security interest may give rise to a default<\/span>, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account, chattel paper, payment intangible, or promissory note<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

e.<\/span> Inapplicability of subsection (d) to certain sales. Subsection (d) does not apply to the sale of a payment intangible or promissory note<\/span>, other than a sale pursuant to a disposition<\/span> under § 8.9A-610<\/a> or an acceptance of collateral<\/span> under § 8.9A-620<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

f.<\/span> Legal restrictions on assignment generally ineffective. Except as otherwise provided in \u00a7\u00a7 8.2A-303<\/a> and 8.9A-407<\/a> and subject to subsections (h) and (i), a rule of law<\/span>, statute<\/span>, or regulation that prohibits, restricts, or requires the consent of a government, governmental body or official, or account debtor to the assignment or transfer of, or creation of a security interest in, an account or chattel paper is ineffective to the extent that the rule of law<\/span>, statute<\/span>, or regulation: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> prohibits, restricts, or requires the consent of the government, governmental body or official, or account debtor to the assignment or transfer of, or the creation, attachment<\/span>, perfection, or enforcement of a security interest in the account or chattel paper; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> provides that the assignment or transfer or the creation, attachment<\/span>, perfection, or enforcement of the security interest may give rise to a default<\/span>, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account or chattel paper. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

g.<\/span> Subsection (b) (3) not waivable. Subject to subsections (h) and (m), an account debtor may not waive<\/span> or vary its option under subsection (b) (3). <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

h.<\/span> Rule for individual under other law<\/span>. This section is subject to law<\/span> other than this title 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. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

i.<\/span> Inapplicability to health-care-insurance receivable. This section does not apply to an assignment of a health-care-insurance receivable. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

j.<\/span> Inapplicability of subsection (d) to certain transactions. Subsection (d) does not apply to: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> a claim or right to receive compensation for injuries or sickness as described in 26 U.S.C. § 104(a) (1), as amended from time to time; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> a claim or right to receive benefits under a special needs trust as described in 42 U.S.C. § 1396p (d) (4), as amended from time to time. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

k.<\/span> Inapplicability to partnership and limited liability company interests. This section does not apply to an interest in a partnership or limited liability company. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

l.<\/span> No inference regarding structured settlements<\/span>. This section shall not be construed or interpreted to relieve or exempt any person or entity from any duties, obligations or rights imposed or provided by the Structured Settlement<\/span> Protection Act (§ 59.1-475<\/a> et seq.), as amended from time to time. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

m.<\/span> Subsections (a), (b), (c), and (g) do not apply to a controllable account or controllable payment intangible. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nDISCHARGE OF ACCOUNT DEBTOR; NOTIFICATION OF ASSIGNMENT; IDENTIFICATION AND\nPROOF OF ASSIGNMENT; RESTRICTIONS ON ASSIGNMENT OF ACCOUNTS, CHATTEL PAPER,\nPAYMENT INTANGIBLES, AND PROMISSORY NOTES INEFFECTIVE (\u00a7 8.9A-406)\n\na. Discharge of account debtor; effect of notification. Subject to subsections\n(b) through (i) and subsection (m), an account debtor on an account, chattel\npaper, or a payment intangible may discharge its obligation by paying the\nassignor until, but not after, the account debtor receives a notification,\nsigned by the assignor or the assignee, that the amount due or to become due has\nbeen assigned and that payment is to be made to the assignee. After receipt of\nthe notification, the account debtor may discharge its obligation by paying the\nassignee and may not discharge the obligation by paying the assignor.\n\nb. When notification ineffective. Subject to subsections (h) and (m),\nnotification is ineffective under subsection (a):\n\n 1. if it does not reasonably identify the rights assigned;\n\n 2. to the extent that an agreement between an account debtor and a seller of a\n payment intangible limits the account debtor’s duty to pay a person\n other than the seller and the limitation is effective under law other than\n this title; or\n\n 3. at the option of an account debtor, if the notification notifies the\n account debtor to make less than the full amount of any installment or other\n periodic payment to the assignee, even if:\n\nA. only a portion of the account, chattel paper, or payment intangible has been\nassigned to that assignee;\n\nB. a portion has been assigned to another assignee; or\n\nC. the account debtor knows that the assignment to that assignee is limited.\n\nc. Proof of assignment. Subject to subsections (h) and (m), if requested by the\naccount debtor, an assignee shall seasonably furnish reasonable proof that the\nassignment has been made. Unless the assignee complies, the account debtor may\ndischarge its obligation by paying the assignor, even if the account debtor has\nreceived a notification under subsection (a).\n\nd. Term restricting assignment generally ineffective. In this subsection,\n“promissory note” includes a negotiable instrument that evidences\nchattel paper. Except as otherwise provided in subsection (e) and \u00a7\u00a7 8.2A-303\nand 8.9A-407, and subject to subsection (h), a term in an agreement between an\naccount debtor and an assignor or in a promissory note is ineffective to the\nextent that it:\n\n 1. prohibits, restricts, or requires the consent of the account debtor or\n person obligated on the promissory note to the assignment or transfer of, or\n the creation, attachment, perfection, or enforcement of a security interest\n in, the account, chattel paper, payment intangible, or promissory note; or\n\n 2. provides that the assignment or transfer or the creation, attachment,\n perfection, or enforcement of the security interest may give rise to a\n default, breach, right of recoupment, claim, defense, termination, right of\n termination, or remedy under the account, chattel paper, payment intangible,\n or promissory note.\n\ne. Inapplicability of subsection (d) to certain sales. Subsection (d) does not\napply to the sale of a payment intangible or promissory note, other than a sale\npursuant to a disposition under § 8.9A-610 or an acceptance of collateral\nunder § 8.9A-620.\n\nf. Legal restrictions on assignment generally ineffective. Except as otherwise\nprovided in \u00a7\u00a7 8.2A-303 and 8.9A-407 and subject to subsections (h) and (i), a\nrule of law, statute, or regulation that prohibits, restricts, or requires the\nconsent of a government, governmental body or official, or account debtor to the\nassignment or transfer of, or creation of a security interest in, an account or\nchattel paper is ineffective to the extent that the rule of law, statute, or\nregulation:\n\n 1. prohibits, restricts, or requires the consent of the government,\n governmental body or official, or account debtor to the assignment or transfer\n of, or the creation, attachment, perfection, or enforcement of a security\n interest in the account or chattel paper; or\n\n 2. provides that the assignment or transfer or the creation, attachment,\n perfection, or enforcement of the security interest may give rise to a\n default, breach, right of recoupment, claim, defense, termination, right of\n termination, or remedy under the account or chattel paper.\n\ng. Subsection (b) (3) not waivable. Subject to subsections (h) and (m), an\naccount debtor may not waive or vary its option under subsection (b) (3).\n\nh. Rule for individual under other law. This section is subject to law other\nthan this title which establishes a different rule for an account debtor who is\nan individual and who incurred the obligation primarily for personal, family, or\nhousehold purposes.\n\ni. Inapplicability to health-care-insurance receivable. This section does not\napply to an assignment of a health-care-insurance receivable.\n\nj. Inapplicability of subsection (d) to certain transactions. Subsection (d)\ndoes not apply to:\n\n 1. a claim or right to receive compensation for injuries or sickness as\n described in 26 U.S.C. § 104(a) (1), as amended from time to time; or\n\n 2. a claim or right to receive benefits under a special needs trust as\n described in 42 U.S.C. § 1396p (d) (4), as amended from time to time.\n\nk. Inapplicability to partnership and limited liability company interests. This\nsection does not apply to an interest in a partnership or limited liability\ncompany.\n\nl. No inference regarding structured settlements. This section shall not be\nconstrued or interpreted to relieve or exempt any person or entity from any\nduties, obligations or rights imposed or provided by the Structured Settlement\nProtection Act (§ 59.1-475 et seq.), as amended from time to time.\n\nm. Subsections (a), (b), (c), and (g) do not apply to a controllable account or\ncontrollable payment intangible.\n\nHISTORY: 1964, c. 219, \u00a7 8.9-318; 1973, c. 509; 2000, c. 1007; 2003, c. 340;\n2012, c. 155; 2024, c. 652.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}