N.Y. UCC Law § 9-404

Section 9--404. Rights Acquired by Assignee; Claims and Defenses Against\n Assignee.\n (a) Assignee's rights subject to terms, claims, and defenses;\nexceptions. Unless an account debtor has made an enforceable agreement\nnot to assert defenses or claims, and subject to subsections (b) through\n(e), the rights of an assignee are subject to:\n (1) all terms of the agreement between the account debtor and\n assignor and any defense or claim in recoupment arising from\n the transaction that gave rise to the contract; and\n (2) any other defense or claim of the account debtor against the\n assignor which accrues before the account debtor receives a\n notification of the assignment signed by the assignor or the\n assignee.\n (b) Account debtor's claim reduces amount owed to assignee. Subject to\nsubsection (c) and except as otherwise provided in subsection (d), the\nclaim of an account debtor against an assignor may be asserted against\nan assignee under subsection (a) only to reduce the amount the account\ndebtor owes.\n (c) Rule for individual under other law. This section is subject to\nlaw other than this article which establishes a different rule for an\naccount debtor who is an individual and who incurred the obligation\nprimarily for personal, family, or household purposes.\n (d) Omission of required statement in consumer transaction. In a\nconsumer transaction, if a record evidences the account debtor's\nobligation, law other than this article requires that the record include\na statement to the effect that the account debtor's recovery against an\nassignee with respect to claims and defenses against the assignor may\nnot exceed amounts paid by the account debtor under the record, and the\nrecord does not include such a statement, the extent to which a claim of\nan account debtor against the assignor may be asserted against an\nassignee is determined as if the record included such a statement.\n (e) Inapplicability to health-care-insurance receivable. This section\ndoes not apply to an assignment of a health-care-insurance receivable.\n