§ 41-09-05 — (9-105) Control of electronic copy of record evidencing chattel paper

North Dakota § 41-09-05

• Jurisdiction: North Dakota
• Title 41: Uniform Commercial Code
• Ch. 41-09: Secured Transactions

Text

1. A purchaser has control of an authoritative electronic copy of a record evidencing
chattel paper if a system employed for evidencing the assignment of interests in the
chattel paper reliably establishes the purchaser as the person to which the
authoritative electronic copy was assigned.
2. A system satisfies subsection 1 if the record or records evidencing the chattel paper
are created, stored, and assigned in such a manner that:
a. A single authoritative copy of the record or records exists which is unique,
identifiable, and, except as otherwise provided in subdivisions d, e, and f,
unalterable;
b. The authoritative copy identifies the purchaser as the assignee of the record or
records;
c. The authoritative copy is communicated to and maintained by the purchaser or its
designated custodian;
d. Copies or amendments that add or change an identified assignee of the
authoritative copy can be made only with the consent of the purchaser;

e. Each copy of the authoritative copy and any copy of a copy is readily identifiable
as a copy that is not the authoritative copy; and
f. Any amendment of the authoritative copy is readily identifiable as authorized or
unauthorized.
3. A system satisfies subsection 1, and a purchaser has control of an authoritative
electronic copy of a record evidencing chattel paper, if the electronic copy, a record
attached to or logically associated with the electronic copy, or a system in which the
electronic copy is recorded:
a. Enables the purchaser readily to identify each electronic copy as either an
authoritative copy or a nonauthoritative copy;
b. Enables the purchaser readily to identify itself in any way, including by name,
identifying number, cryptographic key, office, or account number, as the assignee
of the authoritative electronic copy; and
c. Gives the purchaser exclusive power, subject to subsection 4, to:
(1) Prevent others from adding or changing an identified assignee of the
authoritative electronic copy; and
(2) Transfer control of the authoritative electronic copy.
4. Subject to subsection 5, a power is exclusive under subdivision c of subsection 3 even
if:
a. The authoritative electronic copy, a record attached to or logically associated with
the authoritative electronic copy, or a system in which the authoritative electronic
copy is recorded limits the use of the authoritative electronic copy or has a
protocol programmed to cause a change, including a transfer or loss of control; or
b. The power is shared with another person.
5. A power of a purchaser is not shared with another person under subdivision b of
subsection 4 and the purchaser's power is not exclusive if:
a. The purchaser 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 purchaser; or
(2) Is the transferor to the purchaser of an interest in the chattel paper.
6. If a purchaser has the powers specified in subdivision c of subsection 3, the powers
are presumed to be exclusive.
7. A purchaser has control of an authoritative electronic copy of a record evidencing
chattel paper if another person, other than the transferor to the purchaser of an
interest in the chattel paper:
a. Has control of the authoritative electronic copy and acknowledges that it has
control on behalf of the purchaser; or
b. Obtains control of the authoritative electronic copy after having acknowledged
that it will obtain control of the electronic copy on behalf of the purchaser.