This framework for control over electronic chattel paper is a collaborative project between the Working Group on Transferability of Electronic Financial Assets-a joint working group of the Committee on Cyberspace Law and the Committee on the Uniform Commercial Code of the American Bar Association Business Law Section-and The Open Group. This Guide is intended to provide a framework for analyzing when and if a party is able to show "control" over electronic chattel paper (ECP) pursuant to UCC § 9-105. We believe that the need to show control over ECP is likely to arise in two situations. First, transactional participants and users of a "Control System" will need to be convinced that the legal requirements are met in order for various transactions to proceed. A Control System will need to work within a "Control Environment" that provides a sound basis for trust in the integrity of the Control System. A Control Environment must also have certain features in order for the Control System to meet the requirements for control under UCC § 9-105. Developers of Control Systems and Control Environments must be able to show and explain how and why their systems satisfy the requirements of UCC § 9-105. Second, the ultimate test of whether a Control System and a Control Environment working together actually provide control under UCC § 9-105 will be in the context of a legal proceeding challenging a secured party's claim of perfection by control. The secured party must be able to demonstrate how and why the Control System meets the requirements of UCC § 9-105. This Guide frames the issue of control under UCC § 9-105 in a question and answer format based on a technology-neutral control model. We believe that system developers, with the help of legal counsel, will need to be able to answer the questions set forth below, both in order to provide a marketable product/ service and to enable the users of their products/services to obtain predictable legal results.
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