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.
41-12-06. (12-106) Discharge of account debtor on controllable account or controllable payment intangible. 1. An account debtor on a controllable account or controllable payment intangible may discharge its obligation by paying: a. The person having control of the controllable electronic record that evidences the controllable account or controllable payment intangible; or b. Except as provided in subsection 2, a person that formerly had control of the controllable electronic record. 2. Subject to subsection 4, 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: a. Is signed by a person that formerly had control or the person to which control was transferred; b. Reasonably identifies the controllable account or controllable payment intangible; c. Notifies the account debtor that control of the controllable electronic record that evidences the controllable account or controllable payment intangible was transferred; d. Identifies the transferee, in any reasonable way, including by name, identifying number, cryptographic key, office, or account number; and e. Provides a commercially reasonable method by which the account debtor is to pay the transferee. 3. After receipt of a notification that complies with subsection 2, 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. 4. Subject to subsection 8, notification is ineffective under subsection 2: a. 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; b. 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 c. At the option of the account debtor, if the notification notifies the account debtor to: (1) Divide a payment; (2) Make less than the full amount of an installment or other periodic payment; or (3) Pay any part of a payment by more than one method or to more than one person. 5. Subject to subsection 8, if requested by the account debtor, the person giving the notification under subsection 2 seasonably shall furnish reasonable proof, using the method in the agreement referred to in subdivision a of subsection 4, 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 2.
6. A person furnishes reasonable proof under subsection 5 that control has been transferred if the person demonstrates, using the method in the agreement referred to in subdivision a of subsection 4, that the transferee has the power to: a. Avail itself of substantially all the benefit from the controllable electronic record; b. Prevent others from availing themselves of substantially all the benefit from the controllable electronic record; and c. Transfer the powers specified in subdivisions a and b to another person. 7. Subject to subsection 8, an account debtor may not waive or vary its rights under subdivision a of subsection 4 and subsection 5 or its option under subdivision c of subsection 4. 8. 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.