intangible. 1. Discharge of account debtor. 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. Content and effect of notification. Subject to subsection 4, the account debtor shall 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, inany reasonable way, includingby 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. Discharge following effective notification. 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 shall not discharge the obligation by paying a person that formerly had control. 4. When notification ineffective. Subject to subsection 8, notification isineffective 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 must 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 iseffective under law other than this Article; 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 fullamount 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. Proof of transfer of control. Subject tosubsection 8,ifrequestedby 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 subsection 4, paragraph “a”, that control ofthe controllable electronicrecordhas been transferred. Unless the personcomplies 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. What constitutes reasonable proof. A person furnishes reasonable proof under subsection 5 that control has been transferred ifthe person demonstrates, using the method in the agreement referred to in subsection 4, paragraph “a”, that the transferee has the power to: a. avail itselfof 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 paragraphs “a” and “b” to another person. 7. Rights not waivable. Subject tosubsection 8, an account debtor shall not waive or vary itsrights under subsection 4,paragraph “a”, and subsection 5 or its option under subsection 4,paragraph “c”. 8. Rule for individualunder other law. This sectionis subject to law otherthanthis Article whichestablishesa different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.
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