SECTION 2B-503. CONTRACTUAL RESTRICTIONS ON TRANSFER.

(a) Except as otherwise provided in subsections (b) and (c), a term contractual restriction in a license restricting on transfer of a party's contractual interest or of a licensor's informational property rights in the information that is the subject of a license is enforceable. A transfer made in breach of an enforceable term that prohibits transfer is ineffective.

(b) A party may create a financier's interest notwithstanding subsection (a)a term that prohibits transfer of a party's interest or creation of a financier's interest, except to the extent that creation of the financier's interest would be is precluded under Section 2B-502 in the absence of a term restricting transfer. However, cCreation of the financier's interest in violation of athe term restricting transfer constitutes a breach.

(c) A term that prohibits or requires the other party's consent for transfer of a party's interest in an account or in a general intangible for money due or to become due, is not enforceable.

Uniform Law Source: Section 2A-303(2)(3)(4)(6)(8).

"Contract". Section 2B-102. "Financier". Section 2B-102. "Information". Section 2B-102. "License". Section 2B-102. "Licensor". Section 2B-102. "Money". Section 1-201. "Party". Section 1-201. "Rights". Section 1-201.

"Term". Section 1-201.

a. Voted 8-0 to delete provision that invalidated a prohibition on transfer in a mass market license.

1. General Enforceability. Subsection (a) generally validates contractual restrictions on the transfer of a contractual interest. This is consistent with both the underlying theme of this article recognizing contractual choice and with the importance of the retained interest of the licensor in a license arrangement. Under Seciton 2B-502, many licenses are not transferable without licensor consent even in the absence of a contract provision to that effect.

2. Financing Interests. The exceptions to this policy relate to financing arrangements. Provisions that purport to limit the transfer of interests in a cash flow by either party are not enforceable. This is consistent with the position in current Article 9. Additionally, subsection (b) allows the by either party are not enforceable. This is consistent with the position in current Article 9. Additionally, subsection (b) allows the creation of a security interest from a license and the creation of a financier's interest under this Article despite a contract provision precluding that act if the interest could be created under Section 2B-502. This does not authorize or all enforcement of the interest. Additionally, the other party to the contract is entitled to enforcement of its contract terms in the sense that creation of an interest in violation of a contract clause barring it constitutes a breach.