Vermont § 408 - § 9—408.

§ 408. § 9—408.

• Restrictions on assignment of promissory notes, health care insurance receivables,
  and certain general intangibles ineffective (a) Except as otherwise provided in subsections (b) and (f) of this section, 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) Subsection (a) of this section 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 section 9—610 of this title or an acceptance of collateral under section 9—620 of this title. (c) Except as otherwise provided in subsection (f) of this section, a rule of law, statute,
  or regulation, which 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) 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) of
  this section would be effective under law other than this article but is ineffective
  under subsection (a) or (c) of this section, 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) This section prevails over any inconsistent provisions of this title. (f) This section does not apply to a security interest in an ownership interest in a general
  partnership, limited partnership, or limited liability company. (g) In this section, “promissory note” includes a negotiable instrument that evidences
  chattel paper. (Added 1999, No. 106 (Adj. Sess.), § 2, eff. July 1, 2001; amended 2013, No. 157 (Adj. Sess.), § 1; 2025, No. 17, § 9, eff. July 1, 2025.)