554.9206  Agreement not to assert defenses against assignee--modification of sales warranties where security agreement exists.

1.  Subject to any statute or decision which establishes a different rule for buyers or lessees of consumer goods, an agreement by a buyer or lessee that the buyer or lessee will not assert against an assignee any claim or defense which the buyer or lessee may have against the seller or lessor is enforceable by an assignee who takes that assignee's assignment for value, in good faith and without notice of a claim or defense, except as to defenses of a type which may be asserted against a holder in due course of a negotiable instrument under the Article on Negotiable Instruments (Article 3). A buyer who as part of one transaction signs both a negotiable instrument and a security agreement makes such an agreement.

2.  When a seller retains a purchase money security interest in goods the Article on Sales (Article 2) governs the sale and any disclaimer, limitation or modification of the seller's warranties.

Section History: Early form

  [C66, 71, 73, 75, 77, 79, 81, § 554.9206]

Section History: Recent form

  94 Acts, ch 1167, §118, 122

Internal References

  Referred to in § 15E.91, 16.26, 16A.9, 554.9318

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