Common use of Limitation on Clause in Contracts

Limitation on. ineffectiveness under subsections 1 and 3. 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 3 would be effective under law other than this Article but is ineffective under subsection 1 or 3, the creation, attachment, or perfection of a security interest in the promissory note, health care insurance receivable, or general intangible: a. is not enforceable against the person obligated on the promissory note or the account debtor; b. does not impose a duty or obligation on the person obligated on the promissory note or the account debtor; c. 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; d. 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; e. 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 f. does not entitle the secured party to enforce the security interest in the promissory note, health care insurance receivable, or general intangible.

Limitation on. ineffectiveness under subsections 1 and 3. 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 3 would be effective under law other than this Article but is ineffective under subsection 1 or 3, the creation, attachment, or perfection of a security interest in the promissory note, health care insurance receivable, or general intangible: a. is not enforceable against the person obligated on the promissory note or the account debtor; b. does not impose a duty or obligation on the person obligated on the promissory note or the account debtor; c. 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; d. does not entitle the secured party to use or assign the debtor’s '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; e. 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 f. does not entitle the secured party to enforce the security interest in the promissory note, health care insurance receivable, or general intangible.