## Facts

- Rinden Professional Association, a law firm, entered a lease-purchase agreement with Intertel Communications Corporation for an office telephone system, payable monthly over eight years with a $1 end-of-term purchase option.
- Intertel arranged to assign its right to receive Rinden’s payment stream to Chemical Bank for a discounted lump-sum payment.
- Intertel sent Rinden a notice of assignment and a signed instrument stating Rinden’s payment obligation to Chemical Bank was “absolute and unconditional” and would continue regardless of equipment defects or Intertel’s nonperformance.
- Rinden executed and returned the instrument; Chemical Bank then paid Intertel about $8,800 for the assignment.
- Approximately three years later, the phone system malfunctioned; after unsuccessful efforts to obtain correction from Intertel, Rinden stopped making payments and replaced the system.
- Chemical Bank demanded continued payments under the assignment and sued after Rinden refused.
- Rinden argued the waiver was ineffective for lack of separate consideration, that Chemical Bank should be subject to Rinden’s defenses against Intertel, and that consumer-type limitations should block enforcement.

## Issues

1. Whether Rinden’s executed “absolute and unconditional” instrument validly waived defenses against Chemical Bank as assignee under former UCC § 9-206(1).
2. Whether the waiver was unenforceable because Rinden received no separate consideration for signing it.
3. Whether consumer-style restrictions on waiver-of-defenses clauses applied to this business equipment transaction.

## Decision

- The New Hampshire Supreme Court affirmed judgment for Chemical Bank.
- The court held the signed instrument functioned as both notice of assignment and an enforceable waiver-of-defenses agreement.
- The court held the waiver was enforceable because Chemical Bank took the assignment for value, in good faith, and without notice of claims or defenses.
- The court held consumer limitations on such waivers did not apply because Rinden was a business entity using the system for business purposes.
- Rinden was required to make the remaining payments to Chemical Bank notwithstanding equipment defects or Intertel’s breach; any remedies lay against Intertel.

## Legal Principles

- Under former UCC § 9-206(1), an account debtor’s agreement not to assert claims or defenses against an assignee is enforceable if the assignee takes the assignment for value, in good faith, and without notice of claims or defenses.
- Enforceability under UCC § 9-206(1) does not depend on separate consideration paid to the debtor for executing the waiver; the statutory conditions governing the assignee control.
- A clearly stated “absolute and unconditional” payment obligation in a commercial assignment can cut off the debtor’s defenses against the assignee, even when the underlying goods later prove defective.
- Consumer restrictions on waiver-of-defenses clauses are limited to consumer contexts and do not extend to commercial transactions involving business equipment and business entities.

## Conclusion

The court enforced a commercial waiver-of-defenses clause accompanying an assignment of lease-purchase payments, holding that because the bank took for value, in good faith, and without notice, the debtor remained obligated to pay the assignee despite defects in the equipment and disputes with the vendor.


Chemical Bank v. Rinden Pro. Ass'n, 126 N.H. 688, 498 A.2d 706 (N.H. 1985)