(a)An account debtor on a controllable
account or a controllable payment intangible may discharge its
obligation by paying:
(1)the person having control of the controllable electronic record
that evidences the controllable account or the controllable
payment intangible; or
(2)except as provided in subsection (b), a person that formerly
had control of the controllable electronic record.
(b)Subject to subsection (d), the account debtor may not discharge
its obligation by paying a person that formerly had control of the
controllable electronic record if the account debtor receives a
notification that:
(1)is signed by a person that formerly had control or by the
person to which control was transferred;
(2)reasonably identifies the controllable account or controllable
payment intangible;
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(a) An account debtor on a controllable
account or a controllable payment intangible may discharge its
obligation by paying:
(1) the person having control of the controllable electronic record
that evidences the controllable account or the controllable
payment intangible; or
(2) except as provided in subsection (b), a person that formerly
had control of the controllable electronic record.
(b) Subject to subsection (d), the account debtor may not discharge
its obligation by paying a person that formerly had control of the
controllable electronic record if the account debtor receives a
notification that:
(1) is signed by a person that formerly had control or by the
person to which control was transferred;
(2) reasonably identifies the controllable account or controllable
payment intangible;
(3) notifies the account debtor that control of the controllable
electronic record that evidences the controllable account or
controllable payment intangible was transferred;
(4) identifies the transferee, in any reasonable way, including by
name, identifying number, cryptographic key, office, or account
number; and
(5) provides a commercially reasonable method by which the
account debtor is to pay the transferee.
(c) After receipt of a notification that complies with subsection (b),
the account debtor may discharge its obligation by paying in
accordance with the notification and may not discharge the obligation
by paying a person that formerly had control.
(d) Subject to subsection (h), notification is ineffective under
subsection (b):
(1) unless, before the notification is sent, the account debtor and
the person that, at that time, had control of the controllable
electronic record that evidences the controllable account or the
controllable payment intangible agree in a signed record to a
commercially reasonable method by which a person may furnish
reasonable proof that control has been transferred;
(2) to the extent an agreement between the account debtor and
seller of a payment intangible limits the account debtor's duty to
pay a person other than the seller and the limitation is effective
under law other than this chapter; or
(3) at the option of the account debtor, if the notification notifies
the account debtor to:
(A) divide a payment;
(B) make less than the full amount of an installment or other
periodic payment; or
(C) pay any part of a payment by more than one (1) method or
to more than one (1) person.
(e) Subject to subsection (h), if requested by the account debtor, the
person giving notification under subsection (b) seasonably shall furnish
reasonable proof, using the method in the agreement described in
subsection (d)(1), that control of the controllable electronic record has
been transferred. Unless the person complies with the request, the
account debtor may discharge its obligation by paying a person that
formerly had control, even if the account debtor has received a
notification under subsection (b).
(f) A person furnishes reasonable proof under subsection (e) that
control has been transferred if the person demonstrates, using the
method in the agreement described in subsection (d)(1), that the
transferee has the power to:
(1) avail itself of substantially all the benefit from the controllable
electronic record;
(2) prevent others from availing themselves of substantially all the
benefit from the controllable electronic record; and
(3) transfer the powers specified in subdivisions (1) and (2) to
another person.
(g) Subject to subsection (h), an account debtor may not waive or
vary its rights under subsections (d)(1) and (e) or its option under
subsection (d)(3).
(h) This section is subject to law other than this chapter that
establishes a different rule for an account debtor who is an individual
and who incurred the obligation primarily for personal, family, or
household purposes.