Asked by Jennifer Vandiver on Jul 03, 2024

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Article 9 of the UCC makes ineffective any term in a contract prohibiting the assignment of a security interest arising out of a sale of any right to payment for goods sold.

Security Interest

A legal claim or lien on property as collateral for the repayment of a debt, securing an interest in the property for the creditor.

UCC Article 9

A provision of the Uniform Commercial Code dealing with secured transactions, including the assignment of security interests in personal property.

  • Acquire knowledge about the influence of the Uniform Commercial Code on transferring contracts and third-party rights.
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Verified Answer

MY
MAYRA YANEZJul 08, 2024
Final Answer :
True
Explanation :
Article 9 of the UCC (Uniform Commercial Code) is designed to regulate secured transactions, including the assignment of security interests. It generally invalidates clauses in contracts that prohibit the assignment of a security interest in accounts, general intangibles, or payment intangibles, which includes rights to payment for goods sold. This is to facilitate the free flow of commerce by allowing businesses to use their accounts receivable as collateral.