                                 CODE OF VIRGINIA

RIGHTS IN CONTROLLABLE ACCOUNT, CONTROLLABLE ELECTRONIC RECORD, AND CONTROLLABLE
PAYMENT INTANGIBLE. (§ 8.12-104)

a. Applicability of section to controllable account and controllable payment
intangible. This section applies to the acquisition and purchase of rights in a
controllable account or controllable payment intangible, including the rights
and benefits under subsections (c), (d), (e), (g), and (h) of a purchaser and
qualifying purchaser, in the same manner this section applies to a controllable
electronic record.

b. Control of controllable account and controllable payment intangible. To
determine whether a purchaser of a controllable account or a controllable
payment intangible is a qualifying purchaser, the purchaser obtains control of
the account or payment intangible if it obtains control of the controllable
electronic record that evidences the account or payment intangible.

c. Applicability of other law to acquisition of rights. Except as provided in
this section, law other than this article determines whether a person acquires a
right in a controllable electronic record and the right the person acquires.

d. Shelter principle and purchase of limited interest. A purchaser of a
controllable electronic record acquires all rights in the controllable
electronic record that the transferor had or had power to transfer, except that
a purchaser of a limited interest in a controllable electronic record acquires
rights only to the extent of the interest purchased.

e. Rights of qualifying purchaser. A qualifying purchaser acquires its rights in
the controllable electronic record free of a claim of a property right in the
controllable electronic record.

f. Limitation of rights of qualifying purchaser in other property. Except as
provided in subsections (a) and (e) for a controllable account and a
controllable payment intangible or law other than this article, a qualifying
purchaser takes a right to payment, right to performance, or other interest in
property evidenced by the controllable electronic record subject to a claim of a
property right in the right to payment, right to performance, or other interest
in property.

g. No-action protection for qualifying purchaser. An action may not be asserted
against a qualifying purchaser based on both a purchase by the qualifying
purchaser of a controllable electronic record and a claim of a property right in
another controllable electronic record, whether the action is framed in
conversion, replevin, constructive trust, equitable lien, or other theory.

h. Filing not notice. Filing of a financing statement under Article 9 is not
notice of a claim of a property right in a controllable electronic record.

HISTORY: 2024, c. 652.