{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/8.12-106.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/8.12-106.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/8.12-106.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/8.12-106.html"}],"law_id":56311,"edition_id":1,"section_id":56311,"structure_id":12822,"section_number":"8.12-106","catch_line":"Discharge of account debtor on controllable account or controllable payment intangible","history":"2024, c. 652.","full_text":"a\n\nDischarge of account debtor. An account debtor on a controllable account or controllable payment intangible may discharge its obligation by paying:1\n\nthe person having control of the controllable electronic record that evidences the controllable account or controllable payment intangible; or2\n\nexcept as provided in subsection (b), a person that formerly had control of the controllable electronic record.b\n\nContent and effect of notification. Subject to subsection (d), 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\n\nis signed by a person that formerly had control or the person to which control was transferred;2\n\nreasonably identifies the controllable account or controllable payment intangible;3\n\nnotifies the account debtor that control of the controllable electronic record that evidences the controllable account or controllable payment intangible was transferred;4\n\nidentifies the transferee, in any reasonable way, including by name, identifying number, cryptographic key, office, or account number; and5\n\nprovides a commercially reasonable method by which the account debtor is to pay the transferee.c\n\nDischarge following effective notification. After receipt of a notification that complies with subsection (b), 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\n\nWhen notification ineffective. Subject to subsection (h), notification is ineffective under subsection (b):1\n\nunless, 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\n\nto 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; or3\n\nat the option of the account debtor, if the notification notifies the account debtor to:A\n\ndivide a payment;B\n\nmake less than the full amount of an installment or other periodic payment; orC\n\npay any part of a payment by more than one method or to more than one person.e\n\nProof of transfer of control. Subject to subsection (h), if requested by the account debtor, the person giving the notification under subsection (b) seasonably shall furnish reasonable proof, using the method in the agreement referred to in subsection (d)(1), 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).f\n\nWhat constitutes reasonable proof. A person furnishes reasonable proof under subsection (e) that control has been transferred if the person demonstrates, using the method in the agreement referred to in subsection (d)(1), that the transferee has the power to:1\n\navail itself of substantially all the benefit from the controllable electronic record;2\n\nprevent others from availing themselves of substantially all the benefit from the controllable electronic record; and3\n\ntransfer the powers specified in paragraphs (1) and (2) to another person.g\n\nRights not waivable. Subject to subsection (h), an account debtor may not waive or vary its rights under subsections (d)(1) and (e) or its option under subsection (d)(3).h\n\nRule for individual under other law. 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.","order_by":null,"text":{"0":{"id":206219,"text":"Discharge of account debtor. An account debtor on a controllable account or controllable payment intangible may discharge its obligation by paying:","type":"section","prefixes":["a"],"prefix":"a","entire_prefix":"a","prefix_anchor":"a","level":1,"next_prefix":"a1"},"1":{"id":206220,"text":"the person having control of the controllable electronic record that evidences the controllable account or controllable payment intangible; or","type":"section","prefixes":["a","1"],"prefix":"1","entire_prefix":"a1","prefix_anchor":"a1","level":2,"prior_prefix":"a","next_prefix":"a2"},"2":{"id":206221,"text":"except as provided in subsection (b), a person that formerly had control of the controllable electronic record.","type":"section","prefixes":["a","2"],"prefix":"2","entire_prefix":"a2","prefix_anchor":"a2","level":2,"prior_prefix":"a1","next_prefix":"b"},"3":{"id":206222,"text":"Content and effect of notification. Subject to subsection (d), 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:","type":"section","prefixes":["b"],"prefix":"b","entire_prefix":"b","prefix_anchor":"b","level":1,"prior_prefix":"a2","next_prefix":"b1"},"4":{"id":206223,"text":"is signed by a person that formerly had control or the person to which control was transferred;","type":"section","prefixes":["b","1"],"prefix":"1","entire_prefix":"b1","prefix_anchor":"b1","level":2,"prior_prefix":"b","next_prefix":"b2"},"5":{"id":206224,"text":"reasonably identifies the controllable account or controllable payment intangible;","type":"section","prefixes":["b","2"],"prefix":"2","entire_prefix":"b2","prefix_anchor":"b2","level":2,"prior_prefix":"b1","next_prefix":"b3"},"6":{"id":206225,"text":"notifies the account debtor that control of the controllable electronic record that evidences the controllable account or controllable payment intangible was transferred;","type":"section","prefixes":["b","3"],"prefix":"3","entire_prefix":"b3","prefix_anchor":"b3","level":2,"prior_prefix":"b2","next_prefix":"b4"},"7":{"id":206226,"text":"identifies the transferee, in any reasonable way, including by name, identifying number, cryptographic key, office, or account number; and","type":"section","prefixes":["b","4"],"prefix":"4","entire_prefix":"b4","prefix_anchor":"b4","level":2,"prior_prefix":"b3","next_prefix":"b5"},"8":{"id":206227,"text":"provides a commercially reasonable method by which the account debtor is to pay the transferee.","type":"section","prefixes":["b","5"],"prefix":"5","entire_prefix":"b5","prefix_anchor":"b5","level":2,"prior_prefix":"b4","next_prefix":"c"},"9":{"id":206228,"text":"Discharge following effective notification. After receipt of a notification that complies with subsection (b), 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.","type":"section","prefixes":["c"],"prefix":"c","entire_prefix":"c","prefix_anchor":"c","level":1,"prior_prefix":"b5","next_prefix":"d"},"10":{"id":206229,"text":"When notification ineffective. Subject to subsection (h), notification is ineffective under subsection (b):","type":"section","prefixes":["d"],"prefix":"d","entire_prefix":"d","prefix_anchor":"d","level":1,"prior_prefix":"c","next_prefix":"d1"},"11":{"id":206230,"text":"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;","type":"section","prefixes":["d","1"],"prefix":"1","entire_prefix":"d1","prefix_anchor":"d1","level":2,"prior_prefix":"d","next_prefix":"d2"},"12":{"id":206231,"text":"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","type":"section","prefixes":["d","2"],"prefix":"2","entire_prefix":"d2","prefix_anchor":"d2","level":2,"prior_prefix":"d1","next_prefix":"d3"},"13":{"id":206232,"text":"at the option of the account debtor, if the notification notifies the account debtor to:","type":"section","prefixes":["d","3"],"prefix":"3","entire_prefix":"d3","prefix_anchor":"d3","level":2,"prior_prefix":"d2","next_prefix":"A"},"14":{"id":206233,"text":"divide a payment;","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"prior_prefix":"d3","next_prefix":"B"},"15":{"id":206234,"text":"make less than the full amount of an installment or other periodic payment; or","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"16":{"id":206235,"text":"pay any part of a payment by more than one method or to more than one person.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"e"},"17":{"id":206236,"text":"Proof of transfer of control. Subject to subsection (h), if requested by the account debtor, the person giving the notification under subsection (b) seasonably shall furnish reasonable proof, using the method in the agreement referred to in subsection (d)(1), 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).","type":"section","prefixes":["e"],"prefix":"e","entire_prefix":"e","prefix_anchor":"e","level":1,"prior_prefix":"C","next_prefix":"f"},"18":{"id":206237,"text":"What constitutes reasonable proof. A person furnishes reasonable proof under subsection (e) that control has been transferred if the person demonstrates, using the method in the agreement referred to in subsection (d)(1), that the transferee has the power to:","type":"section","prefixes":["f"],"prefix":"f","entire_prefix":"f","prefix_anchor":"f","level":1,"prior_prefix":"e","next_prefix":"f1"},"19":{"id":206238,"text":"avail itself of substantially all the benefit from the controllable electronic record;","type":"section","prefixes":["f","1"],"prefix":"1","entire_prefix":"f1","prefix_anchor":"f1","level":2,"prior_prefix":"f","next_prefix":"f2"},"20":{"id":206239,"text":"prevent others from availing themselves of substantially all the benefit from the controllable electronic record; and","type":"section","prefixes":["f","2"],"prefix":"2","entire_prefix":"f2","prefix_anchor":"f2","level":2,"prior_prefix":"f1","next_prefix":"f3"},"21":{"id":206240,"text":"transfer the powers specified in paragraphs (1) and (2) to another person.","type":"section","prefixes":["f","3"],"prefix":"3","entire_prefix":"f3","prefix_anchor":"f3","level":2,"prior_prefix":"f2","next_prefix":"g"},"22":{"id":206241,"text":"Rights not waivable. Subject to subsection (h), an account debtor may not waive or vary its rights under subsections (d)(1) and (e) or its option under subsection (d)(3).","type":"section","prefixes":["g"],"prefix":"g","entire_prefix":"g","prefix_anchor":"g","level":1,"prior_prefix":"f3","next_prefix":"h"},"23":{"id":206242,"text":"Rule for individual under other law. 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.","type":"section","prefixes":["h"],"prefix":"h","entire_prefix":"h","prefix_anchor":"h","level":1,"prior_prefix":"g"}},"ancestry":[{"id":12822,"edition_id":1,"name":"Controllable Electronic Records","identifier":"8.12","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:55","date_modified":"2026-06-26 03:43:55","permalink":{"id":281747,"object_type":"structure","relational_id":12822,"identifier":"8.12","token":"8.12","url":"\/8.12\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":80508,"structure_id":12822,"section_number":"8.12-101","catch_line":"Title","url":"\/8.12-101\/","token":"8.12\/8.12-101","metadata":false},{"id":67134,"structure_id":12822,"section_number":"8.12-102","catch_line":"Definitions","url":"\/8.12-102\/","token":"8.12\/8.12-102","metadata":false},{"id":72693,"structure_id":12822,"section_number":"8.12-103","catch_line":"Relation to Article 9 and consumer laws","url":"\/8.12-103\/","token":"8.12\/8.12-103","metadata":{"court_decisions":""}},{"id":70284,"structure_id":12822,"section_number":"8.12-104","catch_line":"Rights in controllable account, controllable electronic record, and controllable payment intangible.","url":"\/8.12-104\/","token":"8.12\/8.12-104","metadata":{"court_decisions":""}},{"id":53978,"structure_id":12822,"section_number":"8.12-105","catch_line":"Control of controllable electronic record","url":"\/8.12-105\/","token":"8.12\/8.12-105","metadata":false},{"id":56311,"structure_id":12822,"section_number":"8.12-106","catch_line":"Discharge of account debtor on controllable account or controllable payment intangible","url":"\/8.12-106\/","token":"8.12\/8.12-106","metadata":false},{"id":70196,"structure_id":12822,"section_number":"8.12-107","catch_line":"Governing law","url":"\/8.12-107\/","token":"8.12\/8.12-107","metadata":{"court_decisions":""}}],"previous_section":{"id":53978,"structure_id":12822,"section_number":"8.12-105","catch_line":"Control of controllable electronic record","url":"\/8.12-105\/","token":"8.12\/8.12-105","metadata":false},"next_section":{"id":70196,"structure_id":12822,"section_number":"8.12-107","catch_line":"Governing law","url":"\/8.12-107\/","token":"8.12\/8.12-107","metadata":{"court_decisions":""}},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/8.12-106\/","history_text":"

This law was first created in 2024. The record of its establishment is cataloged in chapter 652<\/a> of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year.<\/p>","references":[{"id":70196,"section_number":"8.12-107","catch_line":"Governing law","order_by":null,"url":"\/8.12-107\/"},{"id":63561,"section_number":"8.9A-209","catch_line":"Duties of secured party if account debtor has been notified of assignment","order_by":null,"url":"\/8.9A-209\/"}],"refers_to":false,"permalink":{"id":281769,"object_type":"law","relational_id":56311,"identifier":"8.12-106","token":"8.12\/8.12-106","url":"\/8.12-106\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/8.12-106\/","token":"8.12\/8.12-106","dublin_core":{"Title":"Discharge of account debtor on controllable account or controllable payment intangible","Type":"Text","Format":"text\/html","Identifier":"\u00a7 8.12-106","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

a.<\/span> Discharge of account debtor. An account debtor on a controllable account or controllable payment intangible may discharge its obligation by paying: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> the person having control of the controllable electronic record that evidences<\/span> the controllable account or controllable payment intangible; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> except as provided in subsection (b), a person that formerly had control of the controllable electronic record. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

b.<\/span> Content and effect of notification. Subject to subsection (d), 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: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> is signed by a person that formerly had control or the person to which control was transferred; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> reasonably identifies the controllable account or controllable payment intangible; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> notifies the account debtor that control of the controllable electronic record that evidences<\/span> the controllable account or controllable payment intangible was transferred; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> identifies the transferee, in any reasonable way, including by name, identifying number, cryptographic key, office, or account number; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> provides a commercially reasonable method by which the account debtor is to pay the transferee. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

c.<\/span> Discharge following effective notification. After receipt of a notification that complies with subsection (b), 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. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

d.<\/span> When notification ineffective. Subject to subsection (h), notification is ineffective under subsection (b): <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> 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<\/span> 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; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> 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<\/span> other than this article; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> at the option of the account debtor, if the notification notifies the account debtor to: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

A.<\/span> divide a payment; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> make less than the full amount of an installment or other periodic payment; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> pay any part of a payment by more than one method or to more than one person. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

e.<\/span> Proof of transfer of control. Subject to subsection (h), if requested by the account debtor, the person giving the notification under subsection (b) seasonably shall furnish reasonable proof, using the method in the agreement referred to in subsection (d)(1), 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). <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

f.<\/span> What constitutes reasonable proof. A person furnishes reasonable proof under subsection (e) that control has been transferred if the person demonstrates, using the method in the agreement referred to in subsection (d)(1), that the transferee has the power to: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> avail itself of substantially all the benefit from the controllable electronic record; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> prevent others from availing themselves of substantially all the benefit from the controllable electronic record; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> transfer the powers specified in paragraphs (1) and (2) to another person. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

g.<\/span> Rights not waivable. Subject to subsection (h), an account debtor may not waive<\/span> or vary its rights under subsections (d)(1) and (e) or its option under subsection (d)(3). <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

h.<\/span> Rule for individual under other law<\/span>. This section is subject to law<\/span> 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. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nDISCHARGE OF ACCOUNT DEBTOR ON CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT\nINTANGIBLE (\u00a7 8.12-106)\n\na. Discharge of account debtor. An account debtor on a controllable account or\ncontrollable payment intangible may discharge its obligation by paying:\n\n 1. the person having control of the controllable electronic record that\n evidences the controllable account or controllable payment intangible; or\n\n 2. except as provided in subsection (b), a person that formerly had control of\n the controllable electronic record.\n\nb. Content and effect of notification. Subject to subsection (d), the account\ndebtor may not discharge its obligation by paying a person that formerly had\ncontrol of the controllable electronic record if the account debtor receives a\nnotification that:\n\n 1. is signed by a person that formerly had control or the person to which\n control was transferred;\n\n 2. reasonably identifies the controllable account or controllable payment\n intangible;\n\n 3. notifies the account debtor that control of the controllable electronic\n record that evidences the controllable account or controllable payment\n intangible was transferred;\n\n 4. identifies the transferee, in any reasonable way, including by name,\n identifying number, cryptographic key, office, or account number; and\n\n 5. provides a commercially reasonable method by which the account debtor is to\n pay the transferee.\n\nc. Discharge following effective notification. After receipt of a notification\nthat complies with subsection (b), the account debtor may discharge its\nobligation by paying in accordance with the notification and may not discharge\nthe obligation by paying a person that formerly had control.\n\nd. When notification ineffective. Subject to subsection (h), notification is\nineffective under subsection (b):\n\n 1. unless, before the notification is sent, the account debtor and the person\n that, at that time, had control of the controllable electronic record that\n evidences the controllable account or controllable payment intangible agree in\n a signed record to a commercially reasonable method by which a person may\n furnish reasonable proof that control has been transferred;\n\n 2. to the extent an agreement between the account debtor and seller of a\n payment intangible limits the account debtor’s duty to pay a person\n other than the seller and the limitation is effective under law other than\n this article; or\n\n 3. at the option of the account debtor, if the notification notifies the\n account debtor to:\n\nA. divide a payment;\n\nB. make less than the full amount of an installment or other periodic payment;\nor\n\nC. pay any part of a payment by more than one method or to more than one person.\n\ne. Proof of transfer of control. Subject to subsection (h), if requested by the\naccount debtor, the person giving the notification under subsection (b)\nseasonably shall furnish reasonable proof, using the method in the agreement\nreferred to in subsection (d)(1), that control of the controllable electronic\nrecord has been transferred. Unless the person complies with the request, the\naccount debtor may discharge its obligation by paying a person that formerly had\ncontrol, even if the account debtor has received a notification under subsection\n(b).\n\nf. What constitutes reasonable proof. A person furnishes reasonable proof under\nsubsection (e) that control has been transferred if the person demonstrates,\nusing the method in the agreement referred to in subsection (d)(1), that the\ntransferee has the power to:\n\n 1. avail itself of substantially all the benefit from the controllable\n electronic record;\n\n 2. prevent others from availing themselves of substantially all the benefit\n from the controllable electronic record; and\n\n 3. transfer the powers specified in paragraphs (1) and (2) to another person.\n\ng. Rights not waivable. Subject to subsection (h), an account debtor may not\nwaive or vary its rights under subsections (d)(1) and (e) or its option under\nsubsection (d)(3).\n\nh. Rule for individual under other law. This section is subject to law other\nthan this article which establishes a different rule for an account debtor who\nis an individual and who incurred the obligation primarily for personal, family,\nor household purposes.\n\nHISTORY: 2024, c. 652.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}