§ 6A-12-106. Discharge of account debtor on controllable account or controllable payment intangible.
(a) Discharge of account debtor. An account debtor on a controllable account or 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 controllable payment intangible; or
(2) Except as provided in subsection (b) of this section, a person that formerly had control
of the controllable electronic record.
(b) Content and effect of notification. Subject to subsection (d) of this section, 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 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) Discharge following effective notification. After receipt of a notification that complies with subsection (b) of this section,
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) When notification ineffective. Subject to subsection (h) of this section, notification is ineffective under subsection
(b) of this section:
(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 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:
(i) Divide a payment;
(ii) Make less than the full amount of an installment or other periodic payment; or
(iii) Pay any part of a payment by more than one method or to more than one person.
(e) Proof of transfer of control. Subject to subsection (h) of this section, if requested by the account debtor, the
person giving the notification under subsection (b) of this section seasonably shall
furnish reasonable proof, using the method in the agreement referred to in subsection
(d)(1) of this section, 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) of this section.
(f) What constitutes reasonable proof. A person furnishes reasonable proof under subsection (e) of this section that control
has been transferred if the person demonstrates, using the method in the agreement
referred to in subsection (d)(1) of this section, 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 subsections (f)(1) and (f)(2) of this section to
another person.
(g) Rights not waivable. Subject to subsection (h) of this section, an account debtor may not waive or vary
its rights under subsections (d)(1) and (e) of this section or its option under subsection
(d)(3) of this section.
(h) Rule for individual under other law. This section is subject to law other than this chapter which establishes a different
rule for an account debtor who is an individual and who incurred the obligation primarily
for personal, family, or household purposes.