46-4-403 - Transferable records.
46-4-403. Transferable records.
(1) As used in this section, "transferable record" means an electronic record that:
(a) would be a note under Title 70A, Chapter 3, Uniform Commercial Code - NegotiableInstruments, or a document under Title 70A, Chapter 7a, Uniform Commercial Code -Documents of Title, if the electronic record were in writing; and
(b) the issuer of the electronic record expressly has agreed is a transferable record.
(2) A person has control of a transferable record if a system employed for evidencing thetransfer of interests in the transferable record reliably establishes that person as the person towhich the transferable record was issued or transferred.
(3) A system satisfies Subsection (2), and a person is deemed to have control of atransferable record, if the transferable record is created, stored, and assigned in such a mannerthat:
(a) a single authoritative copy of the transferable record exists that is unique, identifiable,and, except as otherwise provided in Subsections (3)(d), (e), and (f), unalterable;
(b) the authoritative copy identifies the person asserting control as:
(i) the person to which the transferable record was issued; or
(ii) if the authoritative copy indicates that the transferable record has been transferred,the person to which the transferable record was most recently transferred;
(c) the authoritative copy is communicated to and maintained by the person assertingcontrol or its designated custodian;
(d) copies or revisions that add or change an identified assignee of the authoritative copycan be made only with the consent of the person asserting control;
(e) each copy of the authoritative copy and any copy of a copy is readily identifiable as acopy that is not the authoritative copy; and
(f) any revision of the authoritative copy is readily identifiable as authorized orunauthorized.
(4) (a) Except as otherwise agreed, a person having control of a transferable record is theholder, as defined in Subsection 70A-1a-201(2)(u), of the transferable record and has the samerights and defenses as a holder of an equivalent record or writing under Title 70A, UniformCommercial Code, including, if the applicable statutory requirements under Subsection70A-3-302(1), Section 70A-7a-501, or Section 70A-9a-308 are satisfied, the rights and defensesof a holder in due course, a holder to which a negotiable document of title has been dulynegotiated, or a purchaser, respectively.
(b) Delivery, possession, and indorsement are not required to obtain or exercise any ofthe rights under Subsection (4)(a).
(5) Except as otherwise agreed, an obligor under a transferable record has the same rightsand defenses as an equivalent obligor under equivalent records or writings under Title 70A,Uniform Commercial Code.
(6) (a) If requested by a person against which enforcement is sought, the person seekingto enforce the transferable record shall provide reasonable proof that the person is in control ofthe transferable record.
(b) Proof may include access to the authoritative copy of the transferable record andrelated business records sufficient to review the terms of the transferable record and to establishthe identity of the person having control of the transferable record.
Amended by Chapter 272, 2007 General Session