Code of Alabama
Ala. Code § 7-9-318 (2026)
Defenses Against Assignee; Modification of Contract After Notification of Assignment; Term Prohibiting Assignment Ineffective; Identification and Proof of Assignment.
✓ official Alabama Legislature (ALISON) text, current July 2026
Repealed by Act 2001-481, p. 647, § 4, effective January 1, 2002.
(Acts 1965, No. 549, p. 811; Acts 1981, No. 81-312, p. 399.)
Notes of Decisions
Cited in 6
cases, 1981–1993 · leading case: Lawson State Cmty. Coll. v. First Cont'l Leasing Corp., 529 So. 2d 926 (Ala. 1988).
Lawson State Cmty. Coll. v. First Cont'l Leasing Corp., 529 So. 2d 926 (Ala. 1988). “Code (1975), § 7-9-318, for the proposition that it may assert, in some fashion, its breach of warranty and fraud claims against Christopher Capital and First Westside Bank, the assignees of the lease.”
Wadsworth v. Yancey Bros. Co., 423 So. 2d 1343 (Ala. 1982). “See, specifically, § 7-9-102(1)(b) (sale of chattel paper); § 7-9-102(2) (transfer for security of chattel paper); § 7-9-105(1)(a) (definition of account debtor), -(1)(b) (definition of chattel paper), -(1)(d) (definition of debtor); § 7-9-308 (priority of rights after outright…”
Head v. S. Dev. Co., 614 So. 2d 1044 (Ala. 1993). “The parties suggest that Ala.Code 1975, § 7-9-318, part of Alabama's version of the Uniform Commercial Code, is applicable in this case.”
Simmons MacH. Co. Inc. v. M. & M Brokerage, Inc., 409 So. 2d 743 (Ala. 1981). “Code 1975, § 7-9-318(3), provides that an "account debtor is authorized to pay the assignor until the account debtor receives notification that the account has been assigned and that payment is to be made to the assignee.”
Perdido Pass Restaurant v. Sunbelt Vacation Travel, Inc. (In re Sunbelt Vacation Travel, Inc.), 94 B.R. 715 (Bankr. S.D. Ala. 1988). “Code of Alabama 1975, 7-9-318. Applying this to the present case, the Partnership’s rights in the rents and leases is not senior in priority to any setoff defense the Restaurant may assert.”
Ford Motor Credit Co. v. Rutherford, 481 So. 2d 870 (Ala. 1985). “Ala. Code (1975), § 7-9-318. The Rules of Civil Procedure require that the defense of failure of consideration be specifically pleaded, however.”
— Ala. Code § 7-9-318(3) — 1 case
Simmons MacH. Co. Inc. v. M. & M Brokerage, Inc., 409 So. 2d 743 (Ala. 1981). “Code 1975, § 7-9-318(3), provides that an "account debtor is authorized to pay the assignor until the account debtor receives notification that the account has been assigned and that payment is to be made to the assignee.”
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