Nevada § 104B.12106 - Discharge of account debtor on controllable account or controllable payment intangible

§ 104B.12106. 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 Article; or (c) At the option of an 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 paragraph (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 paragraph

(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 paragraphs (a) and (b) to another person. 7. Subject to subsection 8, an account debtor may not waive or vary its rights under

paragraph (a) of subsection 4 and subsection 5, or its option under paragraph (c)

of subsection 4. 8. This section is subject to law other than this Article 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.