41-12-04. (12-104) Rights in controllable account, controllable electronic record, and
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controllable payment intangible.
1. This section applies to the acquisition and purchase of rights in a controllable account
or controllable payment intangible, including the rights and benefits under
subsections 3, 4, 5, 7, and 8 of a purchaser and qualifying purchaser, in the same
manner this section applies to a controllable electronic record.
2. To determine whether a purchaser of a controllable account or a controllable payment
intangible is a qualifying purchaser, the purchaser obtains control of the account or
payment intangible if it obtains control of the controllable electronic record that
evidences the account or payment intangible.
3. Except as provided in this section, law other than this chapter determines whether a
person acquires a right in a controllable electronic record and the right the person
acquires.
4. A purchaser of a controllable electronic record acquires all rights in the controllable
electronic record that the transferor had or had power to transfer, except that a
purchaser of a limited interest in a controllable electronic record acquires rights only to
the extent of the interest purchased.
5. A qualifying purchaser acquires its rights in the controllable electronic record free of a
claim of a property right in the controllable electronic record. 6. Except as provided in subsections 1 and 5 for a controllable account and a controllable
payment intangible or law other than this chapter, a qualifying purchaser takes a right
to payment, right to performance, or other interest in property evidenced by the
controllable electronic record subject to a claim of a property right in the right to
payment, right to performance, or other interest in property. 7. An action may not be asserted against a qualifying purchaser based on both a
purchase by the qualifying purchaser of a controllable electronic record and a claim of
a property right in another controllable electronic record, whether the action is framed
in conversion, replevin, constructive trust, equitable lien, or other theory. 8. Filing of a financing statement under chapter 41-09 is not notice of a claim of a
property right in a controllable electronic record.
41-12-05. (12-105) Control of controllable electronic record. 1. A person has control of a controllable electronic record if the electronic record, a
record attached to or logically associated with the electronic record, or a system in
which the electronic record is recorded:
a. Gives the person:
(1)Power to avail itself of substantially all the benefit from the electronic record;
and
(2)Exclusive power, subject to subsection 2, to:
(1)Prevent others from availing themselves of substantially all the benefit
from the electronic record; and
(2)Transfer control of the electronic record to another person or cause
another person to obtain control of another controllable electronic
record as a result of the transfer of the electronic record; and
b. Enables the person readily to identify itself in any way, including by name,
identifying number, cryptographic key, office, or account number, as having the
powers specified in subsection a. 2. Subject to subsection 3, a power is exclusive under paragraph 2 of subdivision a of
subsection 1 even if:
a. The controllable electronic record, a record attached to or logically associated
with the electronic record, or a system in which the electronic record is recorded
limits the use of the electronic record or has a protocol programmed to cause a
change, including a transfer or loss of control or a modification of benefits
afforded by the electronic record; or
b. The power is shared with another person. 3. A power of a person is not shared with another person under subdivision b of
subsection 2 and the person's power is not exclusive if:
a. The person can exercise the power only if the power also is exercised by the
other person; and
b. The other person:
(1)Can exercise the power without exercise of the power by the person; or
(2)Is the transferor to the person of an interest in the controllable electronic
record or a controllable account or controllable payment intangible
evidenced by the controllable electronic record. 4. If a person has the powers specified in paragraph 2 of subdivision a of subsection 1,
the powers are presumed to be exclusive. 5. A person has control of a controllable electronic record if another person, other than
the transferor to the person of an interest in the controllable electronic record or a
controllable account or controllable payment intangible evidenced by the controllable
electronic record:
a. Has control of the electronic record and acknowledges that it has control on
behalf of the person; or
b. Obtains control of the electronic record after having acknowledged that it will
obtain control of the electronic record on behalf of the person.
6. A person that has control under this section is not required to acknowledge that it has
control on behalf of another person.
7. If a person acknowledges that it has or will obtain control on behalf of another person,
unless the person otherwise agrees or law other than this chapter or chapter 41-09
otherwise provides, the person does not owe any duty to the other person and is not
required to confirm the acknowledgment to any other person.