N.Y. Uniform Commercial Code Law § 7-106: Control of Electronic Document of Title

Section 7--106. Control of Electronic Document of Title.

(a) A person has control of an electronic document of title if a

system employed for evidencing the transfer of interests in the

electronic document reliably establishes that person as the person to

which the electronic document was issued or transferred.

(b) A system satisfies subsection (a), and a person has control of an

electronic document of title, if the document is created, stored and

transferred in a manner that:

(1) a single authoritative copy of the document exists which is

unique, identifiable, and, except as otherwise provided in paragraphs

(4), (5), and (6), unalterable;

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

(A) the person to which the document was issued; or

(B) if the authoritative copy indicates that the document has been

transferred, the person to which the document was most recently

transferred;

(3) the authoritative copy is communicated to and maintained by the

person asserting control or its designated custodian;

(4) copies or amendments that add or change an identified transferee

of the authoritative copy can be made only with the consent of the

person asserting control;

(5) each copy of the authoritative copy and any copy of a copy is

readily identifiable as a copy that is not the authoritative copy; and

(6) any amendment of the authoritative copy is readily identifiable as

authorized or unauthorized.

(c) A system satisfies subsection (a), and a person has control of an

electronic document of title, if an authoritative electronic copy of the

document, a record attached to or logically associated with the

electronic copy, or a system in which the electronic copy is recorded:

(1) enables the person readily to identify each electronic copy as

either an authoritative copy or a nonauthoritative copy;

(2) enables the person readily to identify itself in any way,

including by name, identifying number, cryptographic key, office, or

account number, as the person to which each authoritative electronic

copy was issued or transferred; and

(3) gives the person exclusive power, subject to subsection (d), to:

(A) prevent others from adding or changing the person to which each

authoritative electronic copy has been issued or transferred; and

(B) transfer control of each authoritative electronic copy.

(d) Subject to subsection (e), a power is exclusive under subsection

(c) (3) (A) even if:

(1) the authoritative electronic copy, a record attached to or

logically associated with the authoritative electronic copy, or a system

in which the authoritative electronic copy is recorded limits the use of

the document of title or has a protocol that is programmed to cause a

change, including a transfer or loss of control; or

(2) the power is shared with another person.

(e) A power of a person is not shared with another person under

subsection (d) (2) and the person's power is not exclusive if:

(1) the person can exercise the power only if the power also is

exercised by the other person; and

(2) the other person:

(A) can exercise the power without exercise of the power by the

person; or

(B) is the transferor to the person of an interest in the document of

title.

(f) If a person has the powers specified in subsection (c) (3) (A) and

(B), the powers are presumed to be exclusive.

(g) A person has control of an electronic document of title if another

person, other than the transferor to the person of an interest in the

document:

(1) has control of the document and acknowledges that it has control

on behalf of the person; or

(2) obtains control of the document after having acknowledged that it

will obtain control of the document on behalf of the person.

(h) A person that has control under this section is not required to

acknowledge that it has control on behalf of another person.

(i) If a person acknowledges that it has or will obtain control on

behalf of another person, unless the person otherwise agrees or law

other than this article or Article 9 otherwise provides, the person does

not owe any duty to the other person and is not required to confirm the

acknowledgment to any other person.