Legislation

* Section 12--107. Governing Law.

(a) Governing law: general rule. Except as provided in subsection (b),
the local law of a controllable electronic record's jurisdiction governs
a matter covered by this article.

(b) Governing law: Section 12--106. For a controllable electronic
record that evidences a controllable account or controllable payment
intangible, the local law of the controllable electronic record's
jurisdiction governs a matter covered by Section 12--106 unless an
effective agreement determines that the local law of another
jurisdiction governs.

(c) Controllable electronic record's jurisdiction. The following rules
determine a controllable electronic record's jurisdiction under this
section:

(1) If the controllable electronic record, or a record attached to or
logically associated with the controllable electronic record and readily
available for review, expressly provides that a particular jurisdiction
is the controllable electronic record's jurisdiction for purposes of
this article, that jurisdiction is the controllable electronic record's
jurisdiction.

(2) If paragraph (1) does not apply and the rules of the system in
which the controllable electronic record is recorded are readily
available for review and expressly provide that a particular
jurisdiction is the controllable electronic record's jurisdiction for
purposes of this article, that jurisdiction is the controllable
electronic record's jurisdiction.

(3) If paragraphs (1) and (2) do not apply and the controllable
electronic record, or a record attached to or logically associated with
the controllable electronic record and readily available for review,
expressly provides that the controllable electronic record is governed
by the law of a particular jurisdiction, that jurisdiction is the
controllable electronic record's jurisdiction.

(4) If paragraphs (1), (2), and (3) do not apply and the rules of the
system in which the controllable electronic record is recorded are
readily available for review and expressly provide that the controllable
electronic record or the system is governed by the law of a particular
jurisdiction, that jurisdiction is the controllable electronic record's
jurisdiction.

(5) If paragraphs (1) through (4) do not apply, the controllable
electronic record's jurisdiction is the District of Columbia.

(d) Applicability of Article 12. If subsection (c)(5) applies and
Article 12 is not in effect in the District of Columbia without material
modification, the governing law for a matter covered by this article is
the law of the District of Columbia as though Article 12 were in effect
in the District of Columbia without material modification. In this
subsection, "Article 12" means Article 12 of Uniform Commercial Code
Amendments (2022).

(e) Relation of matter or transaction to controllable electronic
record's jurisdiction not necessary. To the extent subsections (a) and
(b) provide that the local law of the controllable electronic record's
jurisdiction governs a matter covered by this article, that law governs
even if the matter or a transaction to which the matter relates does not
bear any relation to the controllable electronic record's jurisdiction.

(f) Rights of purchasers determined at time of purchase. The rights
acquired under Section 12--104 by a purchaser or qualifying purchaser
are governed by the law applicable under this section at the time of
purchase.

* NB Effective June 3, 2026