2006 Code of Virginia § 59.1-494 - Transferable records

59.1-494. Transferable records.

(a) In this section, "transferable record" means an electronic record that:

(1) Would be a note under Title 8.3A or a document under Title 8.7 if theelectronic record were in writing; and

(2) The issuer of the electronic record expressly has agreed is atransferable record.

(b) A person has control of a transferable record if a system employed forevidencing the transfer of interests in the transferable record reliablyestablishes that person as the person to which the transferable record wasissued or transferred.

(c) A system satisfies subsection (b), and a person is deemed to have controlof a transferable record, if the transferable record is created, stored, andassigned in such a manner that:

(1) A single authoritative copy of the transferable record exists which isunique, identifiable, and, except as otherwise provided in subdivisions (4),(5), and (6), unalterable;

(2) The authoritative copy identifies the person asserting control as:

(A) The person to which the transferable record was issued; or

(B) If the authoritative copy indicates that the transferable record has beentransferred, the person to which the transferable record was most recentlytransferred;

(3) The authoritative copy is communicated to and maintained by the personasserting control or its designated custodian;

(4) Copies or revisions that add or change an identified assignee of theauthoritative copy can be made only with the consent of the person assertingcontrol;

(5) Each copy of the authoritative copy and any copy of a copy is readilyidentifiable as a copy that is not the authoritative copy; and

(6) Any revision of the authoritative copy is readily identifiable asauthorized or unauthorized.

(d) Except as otherwise agreed, a person having control of a transferablerecord is the holder, as defined in 8.1A-201 (21), of the transferablerecord and has the same rights and defenses as a holder of an equivalentrecord or writing under Titles 8.1A through 8.11, including, if theapplicable statutory requirements under 8.3A-302 (a), 8.7-501, or 8.9A-330 are satisfied, the rights and defenses of a holder in due course, aholder to which a negotiable document of title has been duly negotiated, or apurchaser, respectively. Delivery, possession, and endorsement are notrequired to obtain or exercise any of the rights under this subsection.

(e) Except as otherwise agreed, an obligor under a transferable record hasthe same rights and defenses as an equivalent obligor under equivalentrecords or writings under Titles 8.1A through 8.11.

(f) If requested by a person against which enforcement is sought, the personseeking to enforce the transferable record shall provide reasonable proofthat the person is in control of the transferable record. Proof may includeaccess to the authoritative copy of the transferable record and relatedbusiness records sufficient to review the terms of the transferable recordand to establish the identity of the person having control of thetransferable record.

(2000, c. 995; 2001, c. 86; 2003, c. 353.)