H 206

No. 17  Page 1 of 118
2025
No. 17. An act relating to the Uniform Commercial Code.
                                       (H.206)
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 9A V.S.A. article 1 is amended to read:
                    ARTICLE 1. GENERAL PROVISIONS
                                           ***
§ 1—201. GENERAL DEFINITIONS
                                           ***
   (b) Subject to definitions contained in other articles of this title that apply
to particular articles or parts thereof:
                                           ***
      (10) “Conspicuous,” with reference to a term, means so written,
displayed, or presented that, based on the totality of the circumstances, a
reasonable person against which it is to operate ought to have noticed it.
Whether a term is “conspicuous” or not is a decision for the court.
Conspicuous terms include the following:
         (A) a heading in capitals equal to or greater in size than the
surrounding text, or in contrasting type, font, or color to the surrounding text of
the same or lesser size; and
         (B) language in the body of a record or display in larger type than the
surrounding text, or in contrasting type, font, or color to the surrounding text of
                                                                     VT LEG #383691 v.1
No. 17  Page 2 of 118
2025
the same size, or set off from surrounding text of the same size by symbols or
other marks that call attention to the language.
                                       ***
      (15) “Delivery,” with respect to an electronic document of title means
voluntary transfer of control and with respect to an instrument, a tangible
document of title, or an authoritative tangible copy of a record evidencing
chattel paper, means voluntary transfer of possession.
      (16) “Document of title” means a record (i) that in the regular course of
business or financing is treated as adequately evidencing that the person in
possession or control of the record is entitled to receive, control, hold, and
dispose of the record and the goods the record covers; and (ii) that purports to
be issued by or addressed to a bailee and to cover goods in the bailee’s
possession which are either identified or are fungible portions of an identified
mass. The term includes a bill of lading, transport document, dock warrant,
dock receipt, warehouse receipt, and order for delivery of goods. An electronic
document of title means a document of title evidenced by a record consisting
of information stored in an electronic medium. A tangible document of title
means a document of title evidenced by a record consisting of information that
is inscribed on a tangible medium.
      (16A) “Electronic” means relating to technology having electrical,
digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
                                       ***
                                                                    VT LEG #383691 v.1
No. 17  Page 3 of 118
2025
      (21) “Holder” means:
         (A) the person in possession of a negotiable instrument that is
payable either to bearer or to an identified person that is the person in
possession;
         (B) the person in possession of a negotiable tangible document of
title if the goods are deliverable either to bearer or to the order of the person in
possession; or
         (C) the person in control, other than pursuant to subsection 7-106(g)
of this title, of a negotiable electronic document of title.
                                        ***
      (24) “Money” means a medium of exchange that is currently authorized
or adopted by a domestic or foreign government. The term includes a
monetary unit of account established by an intergovernmental organization or
by agreement between two or more countries. The term does not include an
electronic record that is a medium of exchange recorded and transferable in a
system that existed and operated for the medium of exchange before the
medium of exchange was authorized or adopted by the government.
                                        ***
      (27) “Person” means an individual, corporation, business trust, estate,
trust, partnership, limited liability company, association, joint venture,
government, governmental subdivision, agency, or instrumentality, public
corporation, or any other legal or commercial entity. The term includes a
                                                                     VT LEG #383691 v.1
No. 17  Page 4 of 118
2025
protected series, however denominated, of an entity if the protected series is
established under law other than provided in this title that limits, or limits if
conditions specified under the law are satisfied, the ability of a creditor of the
entity or of any other protected series of the entity to satisfy a claim from
assets of the protected series.
                                       ***
      (36) “Send” “Send,” in connection with a writing, record, or notice
notification, means:
         (A) to deposit in the mail or, deliver for transmission, or transmit by
any other usual means of communication, with postage or cost of transmission
provided for and properly addressed and, in the case of an instrument, to an
address specified thereon or otherwise agreed, or if there be none, addressed to
any address reasonable under the circumstances; or
         (B) in any other way to cause to be received any record or notice
within the time it would have arrived if properly sent to cause the record or
notification to be received within the time it would have been received if
properly sent under subdivision (A) of this subdivision (b)(36).
      (37) “Signed” includes using any symbol executed or adopted with
present intention to adopt or accept a writing. “Sign,” “signed,” “signing,” and
“signature” means, with present intent to authenticate or adopt a record:
         (A) execute or adopt a tangible symbol; or
         (B) attach to or logically associate with the record an electronic
                                                                     VT LEG #383691 v.1
No. 17  Page 5 of 118
2025
symbol, sound, or process.
                                       ***
§ 1—204. VALUE
   Except as otherwise provided in Articles 3, 4, and 5, 6, and 12 of this title, a
person gives value for rights if the person acquires them:
                                       ***
§ 1—301. TERRITORIAL APPLICABILITY; PARTIES’ POWER TO
           CHOOSE APPLICABLE LAW
                                       ***
   (c) If one of the following provisions of this title specifies the applicable
law, that provision governs and a contrary agreement is effective only to the
extent permitted by the law so specified:
                                       ***
      (7) Sections 9—301 through 9—307. Law Governing Perfection, the
Effect of Perfection or Nonperfection, and the Priority of Security Interests.;
      (8) Section 12—107. Governing Law.
                                       ***
§ 1—306. WAIVER OR RENUNCIATION OF CLAIM OR RIGHT AFTER
           BREACH
   A claim or right arising out of an alleged breach may be discharged in
whole or in part without consideration by agreement of the aggrieved party in
an authenticated a signed record.
                                                                    VT LEG #383691 v.1
No. 17  Page 6 of 118
2025
                                       ***
Sec. 2. 9A V.S.A. article 2 is amended to read:
                              ARTICLE 2. SALES
                                       ***
§ 2—102. SCOPE; CERTAIN SECURITY AND OTHER TRANSACTIONS
           EXCLUDED FROM THIS ARTICLE
   Unless the context otherwise requires, this article applies to transactions in
goods; it does not apply to any transaction which although in the form of an
unconditional contract to sell or present sale is intended to operate only as a
security transaction nor does this article impair or repeal any statute regulating
sales to consumers, farmers or other specified classes of buyers.
   (a) Unless the context otherwise requires, and except as provided in
subsection (c) of this section, this article applies to transactions in goods and,
in the case of a hybrid transaction, it applies to the extent provided in
subsection (b) of this section.
   (b) In a hybrid transaction:
      (1) If the sale-of-goods aspects do not predominate, only the provisions
of this article which relate primarily to the sale-of-goods aspects of the
transaction apply, and the provisions that relate primarily to the transaction as a
whole do not apply.
      (2) If the sale-of-goods aspects predominate, this article applies to the
transaction but does not preclude application in appropriate circumstances of
                                                                    VT LEG #383691 v.1
No. 17  Page 7 of 118
2025
other law to aspects of the transaction which do not relate to the sale of goods.
   (c) This article does not:
      (1) apply to a transaction that, even though in the form of an
unconditional contract to sell or present sale, operates only to create a security
interest; or
      (2) impair or repeal a statute regulating sales to consumers, farmers, or
other specified classes of buyers.
                                       ***
§ 2—106. DEFINITIONS: “CONTRACT”; “AGREEMENT”; “CONTRACT
               FOR SALE”; “SALE”; “PRESENT SALE”; “CONFORMING”
               TO CONTRACT; “TERMINATION”; “CANCELLATION”;
               “HYBRID TRANSACTION”
                                       ***
      (5) “Hybrid transaction” means a single transaction involving a sale of
goods and:
          (A) the provision of services;
          (B) a lease of other goods; or
          (C) a sale, lease, or license of property other than goods.
                                       ***
§ 2—201. FORMAL REQUIREMENTS; STATUTE OF FRAUDS
   (1) Except as otherwise provided in this section a contract for the sale of
goods for the price of $500 or more is not enforceable by way of action or
                                                                    VT LEG #383691 v.1
No. 17  Page 8 of 118
2025
defense unless there is some writing a record sufficient to indicate that a
contract for sale has been made between the parties and signed by the party
against whom enforcement is sought or by his the party’s authorized agent or
broker. A writing record is not insufficient because it omits or incorrectly
states a term agreed upon but the contract is not enforceable under this
paragraph subsection beyond the quantity of goods shown in such writing the
record.
   (2) Between merchants if within a reasonable time a writing record in
confirmation of the contract and sufficient against the sender is received and
the party receiving it has reason to know its contents, it satisfies the
requirements of subsection (1) against such the party unless written notice in a
record of objection to its contents is given within ten days after it is received.
                                       ***
§ 2—202. FINAL WRITTEN EXPRESSION: PAROL OR EXTRINSIC
           EVIDENCE
   Terms with respect to which the confirmatory memoranda of the parties
agree or which are otherwise set forth in a writing record intended by the
parties as a final expression of their agreement with respect to such terms as
are included therein may not be contradicted by evidence of any prior
agreement or of a contemporaneous oral agreement but may be explained or
supplemented:
                                                                     VT LEG #383691 v.1
No. 17  Page 9 of 118
2025
      (a) by course of performance, course of dealing, or usage of trade (§ 1—
303); and
      (b) by evidence of consistent additional terms unless the court finds the
writing record to have been intended also as a complete and exclusive
statement of the terms of the agreement.
§ 2—203. SEALS INOPERATIVE
   The affixing of a seal to a writing record evidencing a contract for sale or an
offer to buy or sell goods does not constitute the writing record a sealed
instrument and the law with respect to sealed instruments does not apply to
such a contract or offer.
                                       ***
§ 2—205. FIRM OFFERS
   An offer by a merchant to buy or sell goods in a signed writing record
which by its terms gives assurance that it will be held open is not revocable,
for lack of consideration, during the time stated or if no time is stated for a
reasonable time, but in no event may such period of irrevocability exceed three
months; but any such term of assurance on a form supplied by the offeree must
be separately signed by the offeror.
                                       ***
§ 2—209. MODIFICATION, RESCISSION, AND WAIVER
   (1) An agreement modifying a contract within this article needs no
consideration to be binding.
                                                                    VT LEG #383691 v.1
No. 17  Page 10 of 118
2025
   (2) A signed agreement which excludes modification or rescission except
by a signed writing or other signed record cannot be otherwise modified or
rescinded, but except as between merchants such a requirement on a form
supplied by the merchant must be separately signed by the other party.
                                       ***
Sec. 3. 9A V.S.A. article 2A is amended to read:
                            ARTICLE 2A. LEASES
                                       ***
§ 2A—102. SCOPE
   (1) This article applies to any transaction, regardless of form, that creates a
lease, and, in the case of a hybrid lease, it applies to the extent provided in
subdivision (2) of this section.
   (2) In a hybrid lease:
         A) if the lease-of-goods aspects do not predominate:
             (i) only the provisions of this article which relate primarily to the
lease-of-goods aspects of the transaction apply, and the provisions that relate
primarily to the transaction as a whole do not apply;
             (ii) section 2A—209 of this title applies if the lease is a finance
lease; and
             (iii) section 2A—407 of this title applies to the promises of the
lessee in a finance lease to the extent the promises are consideration for the
right to possession and use of the leased goods; and
                                                                     VT LEG #383691 v.1
No. 17  Page 11 of 118
2025
         (B) if the lease-of-goods aspects predominate, this article applies to
the transaction, but does not preclude application in appropriate circumstances
of other law to aspects of the lease which do not relate to the lease of goods.
§ 2A—103. DEFINITIONS AND INDEX OF DEFINITIONS
   (1) In this article unless the context otherwise requires:
                                       ***
      (h) “Goods” means all things that are movable at the time of
identification to the lease contract, or are fixtures (§ 2A—309), but the term
does not include money, documents, instruments, accounts, chattel paper,
general intangibles, or minerals or the like, including oil and gas, before
extraction. The term also includes the unborn young of animals.
      (h.1) “Hybrid lease” means a single transaction involving a lease of
goods and:
             (i) the provision of services;
             (ii) a sale of other goods; or
             (iii) a sale, lease, or license of property other than goods.
                                       ***
§ 2A—107. WAIVER OR RENUNCIATION OF CLAIM OR RIGHT
              AFTER DEFAULT
   Any claim or right arising out of an alleged default or breach of warranty
may be discharged in whole or in part without consideration by a written
waiver or renunciation in a signed and record delivered by the aggrieved party.
                                                                     VT LEG #383691 v.1
No. 17  Page 12 of 118
2025
                                        ***
§ 2A—201. STATUTE OF FRAUDS
   (1) A lease contract is not enforceable by way of action or defense unless:
                                        ***
      (b) there is a writing record, signed by the party against whom
enforcement is sought or by that party’s authorized agent, sufficient to indicate
that a lease contract has been made between the parties and to describe the
goods leased and the lease term.
   (2) Any description of leased goods or of the lease term is sufficient and
satisfies subsection (1)(b) of this section, whether or not it is specific, if it
reasonably identifies what is described.
   (3) A writing record is not insufficient because it omits or incorrectly states
a term agreed upon, but the lease contract is not enforceable under subsection
(1)(b) of this section beyond the lease term and the quantity of goods shown in
the writing record.
                                        ***
   (5) The lease term under a lease contract referred to in subsection (4) of
this section is:
      (a) if there is a writing record signed by the party against whom
enforcement is sought or by that party’s authorized agent specifying the lease
term, the term so specified;
                                        ***
                                                                       VT LEG #383691 v.1
No. 17  Page 13 of 118
2025
§ 2A—202. FINAL WRITTEN EXPRESSION; PAROL OR EXTRINSIC
              EVIDENCE
   Terms with respect to which the confirmatory memoranda of the parties
agree or which are otherwise set forth in a writing record intended by the
parties as a final expression of their agreement with respect to such terms as
are included therein may not be contradicted by evidence of any prior
agreement or of a contemporaneous oral agreement but may be explained or
supplemented:
      (a) by course of dealing or usage of trade or by course of performance;
and
      (b) by evidence of consistent additional terms unless the court finds the
writing record to have been intended also as a complete and exclusive
statement of the terms of the agreement.
§ 2A—203. SEALS INOPERATIVE
   The affixing of a seal to a writing record evidencing a lease contract or an
offer to enter into a lease contract does not render the writing record a sealed
instrument and the law with respect to sealed instruments does not apply to the
lease contract or offer.
                                      ***
§ 2A—205. FIRM OFFERS
   An offer by a merchant to lease goods to or from another person in a signed
writing record that by its terms gives assurance it will be held open is not
                                                                   VT LEG #383691 v.1
No. 17  Page 14 of 118
2025
revocable, for lack of consideration, during the time stated or, if no time is
stated, for a reasonable time, but in no event may the period of irrevocability
exceed three months. Any such term of assurance on a form supplied by the
offeree must be separately signed by the offeror.
                                       ***
§ 2A—208. MODIFICATION, RESCISSION AND WAIVER
   (1) An agreement modifying a lease contract needs no consideration to be
binding.
   (2) A signed lease agreement that excludes modification or rescission
except by a signed writing record may not be otherwise modified or rescinded,
but, except as between merchants, such a requirement on a form supplied by a
merchant must be separately signed by the other party.
                                       ***
Sec. 4. 9A V.S.A. article 3 is amended to read:
                     ARTICLE 3. COMMERCIAL PAPER
                                       ***
§ 3—104. NEGOTIABLE INSTRUMENT
   (a) Except as provided in subsections (c) and (d) of this section,
“negotiable instrument” means an unconditional promise or order to pay a
fixed amount of money, with or without interest or other charges described in
the promise or order, if it:
                                       ***
                                                                    VT LEG #383691 v.1
No. 17  Page 15 of 118
2025
      (3) does not state any other undertaking or instruction by the person
promising or ordering payment to do any act in addition to the payment of
money, but the promise or order may contain (i) an undertaking or power to
give, maintain, or protect collateral to secure payment, (ii) an authorization or
power to the holder to confess judgment or realize on or dispose of collateral,
or (iii) a waiver of the benefit of any law intended for the advantage or
protection of an obligor, (iv) a term that specifies the law that governs the
promise or order, or (v) an undertaking to resolve in a specified forum a
dispute concerning the promise or order.
                                      ***
§ 3—105. ISSUE OF INSTRUMENT
   (a) “Issue” means:
      (1) the first delivery of an instrument by the maker or drawer, whether
to a holder or nonholder, for the purpose of giving rights on the instrument to
any person; or
      (2) if agreed by the payee, the first transmission by the drawer to the
payee of an image of an item and information derived from the item that
enables the depositary bank to collect the item by transferring or presenting
under federal law an electronic check.
                                      ***
§ 3—401. SIGNATURE NECESSARY FOR LIABILITY ON
           INSTRUMENT
                                                                   VT LEG #383691 v.1
No. 17  Page 16 of 118
2025
   (a) A person is not liable on an instrument unless (i) the person signed the
instrument, or (ii) the person is represented by an agent or representative who
signed the instrument and the signature is binding on the represented person
under section 3—402 of this title.
   (b) A signature may be made (i) manually or by means of a device or
machine, and (ii) by the use of any name, including a trade or assumed name,
or by a word, mark, or symbol executed or adopted by a person with present
intention to authenticate a writing.
                                       ***
§ 3—604. DISCHARGE BY CANCELLATION OR RENUNCIATION
   (a) A person entitled to enforce an instrument, with or without
consideration, may discharge the obligation of a party to pay the instrument (i)
by an intentional voluntary act, such as surrender of the instrument to the party,
destruction, mutilation, or cancellation of the instrument, cancellation or
striking out of the party’s signature, or the addition of words to the instrument
indicating discharge, or (ii) by agreeing not to sue or otherwise renouncing
rights against the party by a signed writing record. The obligation of a party to
pay a check is not discharged solely by destruction of the check in connection
with a process in which information is extracted from the check and an image
of the check is made and, subsequently, the information and image are
transmitted for payment.
                                       ***
                                                                   VT LEG #383691 v.1
No. 17  Page 17 of 118
2025
Sec. 5. 9A V.S.A. article 4A is amended to read:
                      ARTICLE 4A. FUNDS TRANSFERS
                                         ***
§ 4A—103. PAYMENT ORDER—DEFINITIONS
   (a) In this article:
      (1) “Payment order” means an instruction of a sender to a receiving
bank, transmitted orally, electronically, or in writing or in a record, to pay, or
to cause another bank to pay, a fixed or determinable amount of money to a
beneficiary if:
         (i) the instruction does not state a condition to payment to the
beneficiary other than time of payment;
         (ii) the receiving bank is to be reimbursed by debiting an account of,
or otherwise receiving payment from, the sender; and
         (iii) the instruction is transmitted by the sender directly to the
receiving bank or to an agent, funds-transfer system, or communication system
for transmittal to the receiving bank.
                                         ***
§ 4A—201. SECURITY PROCEDURE
   “Security procedure” means a procedure established by agreement of a
customer and a receiving bank for the purpose of (i) verifying that a payment
order or communication amending or cancelling a payment order is that of the
customer, or (ii) detecting error in the transmission or the content of the
                                                                    VT LEG #383691 v.1
No. 17  Page 18 of 118
2025
payment order or communication. A security procedure may impose an
obligation on the receiving bank or the customer and may require the use of
algorithms or other codes, identifying words or, numbers, symbols, sounds,
biometrics, encryption, callback procedures, or similar security devices.
Comparison of a signature on a payment order or communication with an
authorized specimen signature of the customer or requiring a payment order to
be sent from a known email address, IP address, or telephone number is not by
itself a security procedure.
§ 4A—202. AUTHORIZED AND VERIFIED PAYMENT ORDERS
                                      ***
   (b) If a bank and its customer have agreed that the authenticity of payment
orders issued to the bank in the name of the customer as sender will be verified
pursuant to a security procedure, a payment order received by the receiving
bank is effective as the order of the customer, whether or not authorized, if (i)
the security procedure is a commercially reasonable method of providing
security against unauthorized payment orders, and (ii) the bank proves that it
accepted the payment order in good faith and in compliance with the bank’s
obligations under the security procedure and any written agreement or
instruction of the customer, evidenced by a record, restricting acceptance of
payment orders issued in the name of the customer. The bank is not required
to follow an instruction that violates a written an agreement with the customer,
evidenced by a record, or notice of which is not received at a time and in a
                                                                   VT LEG #383691 v.1
No. 17  Page 19 of 118
2025
manner affording the bank a reasonable opportunity to act on it before the
payment order is accepted.
   (c) Commercial reasonableness of a security procedure is a question of law
to be determined by considering the wishes of the customer expressed to the
bank, the circumstances of the customer known to the bank, including the size,
type, and frequency of payment orders normally issued by the customer to the
bank, alternative security procedures offered to the customer, and security
procedures in general use by customers and receiving banks similarly situated.
A security procedure is deemed to be commercially reasonable if (i) the
security procedure was chosen by the customer after the bank offered, and the
customer refused, a security procedure that was commercially reasonable for
that customer, and (ii) the customer expressly agreed in writing a record to be
bound by any payment order, whether or not authorized, issued in its name and
accepted by the bank in compliance with the bank’s obligations under the
security procedure chosen by the customer.
                                       ***
§ 4A—203. UNENFORCEABILITY OF CERTAIN VERIFIED PAYMENT
             ORDERS
   (a) If an accepted payment order is not, under subsection 4A—202(a) of
this title, an authorized order of a customer identified as sender, but is effective
as an order of the customer pursuant to subsection 4A—202(b) of this title, the
following rules apply:
                                                                    VT LEG #383691 v.1
No. 17  Page 20 of 118
2025
      (1) By express written agreement evidenced by a record, the receiving
bank may limit the extent to which it is entitled to enforce or retain payment of
the payment order.
                                       ***
§ 4A—207. MISDESCRIPTION OF BENEFICIARY
                                       ***
   (c) If (i) a payment order described in subsection (b) of this section is
accepted, (ii) the originator’s payment order described the beneficiary
inconsistently by name and number, and (iii) the beneficiary’s bank pays the
person identified by number as permitted by subdivision (b)(1) of this section,
the following rules apply:
      (1) If the originator is a bank, the originator is obliged to pay its order.
      (2) If the originator is not a bank and proves that the person identified
by number was not entitled to receive payment from the originator, the
originator is not obliged to pay its order unless the originator’s bank proves
that the originator, before acceptance of the originator’s order, had notice that
payment of a payment order issued by the originator might be made by the
beneficiary’s bank on the basis of an identifying or bank account number even
if it identifies a person different from the named beneficiary. Proof of notice
may be made by any admissible evidence. The originator’s bank satisfies the
burden of proof if it proves that the originator, before the payment order was
                                                                     VT LEG #383691 v.1
No. 17  Page 21 of 118
2025
accepted, signed a writing record stating the information to which the notice
relates.
                                      ***
§ 4A—208. MISDESCRIPTION OF INTERMEDIARY BANK OR
             BENEFICIARY’S BANK
                                      ***
   (b) This subsection applies to a payment order identifying an intermediary
bank or the beneficiary’s bank both by name and an identifying number if the
name and number identify different persons.
                                      ***
      (2) If the sender is not a bank and the receiving bank proves that the
sender, before the payment order was accepted, had notice that the receiving
bank might rely on the number as the proper identification of the intermediary
or beneficiary’s bank even if it identifies a person different from the bank
identified by name, the rights and obligations of the sender and the receiving
bank are governed by subdivision (1) of this subsection, as though the sender
were a bank. Proof of notice may be made by any admissible evidence. The
receiving bank satisfies the burden of proof if it proves that the sender, before
the payment order was accepted, signed a writing record stating the
information to which the notice relates.
                                      ***
§ 4A—210. REJECTION OF PAYMENT ORDER
                                                                   VT LEG #383691 v.1
No. 17  Page 22 of 118
2025
   (a) A payment order is rejected by the receiving bank by a notice of
rejection transmitted to the sender orally, electronically, or in writing a record.
A notice of rejection need not use any particular words and is sufficient if it
indicates that the receiving bank is rejecting the order or will not execute or
pay the order. Rejection is effective when the notice is given if transmission is
by a means that is reasonable in the circumstances. If notice of rejection is
given by a means that is not reasonable, rejection is effective when the notice
is received. If an agreement of the sender and receiving bank establishes the
means to be used to reject a payment order, (i) any means complying with the
agreement is reasonable and (ii) any means not complying is not reasonable
unless no significant delay in receipt of the notice resulted from the use of the
noncomplying means.
                                       ***
§ 4A—211. CANCELLATION AND AMENDMENT OF PAYMENT
             ORDER
   (a) A communication of the sender of a payment order cancelling or
amending the order may be transmitted to the receiving bank orally,
electronically, or in writing a record. If a security procedure is in effect
between the sender and the receiving bank, the communication is not effective
to cancel or amend the order unless the communication is verified pursuant to
the security procedure or the bank agrees to the cancellation or amendment.
                                       ***
                                                                    VT LEG #383691 v.1
No. 17  Page 23 of 118
2025
§ 4A—305. LIABILITY FOR LATE OR IMPROPER EXECUTION OR
             FAILURE TO EXECUTE PAYMENT ORDER
                                      ***
   (c) In addition to the amounts payable under subsections (a) and (b) of this
section, damages, including consequential damages, are recoverable to the
extent provided in an express written agreement of the receiving bank,
evidenced by a record.
   (d) If a receiving bank fails to execute a payment order it was obliged by
express agreement to execute, the receiving bank is liable to the sender for its
expenses in the transaction and for incidental expenses and interest losses
resulting from the failure to execute. Additional damages, including
consequential damages, are recoverable to the extent provided in an express
written agreement of the receiving bank, evidenced by a record, but are not
otherwise recoverable.
                                      ***
Sec. 6. 9A V.S.A. article 5 is amended to read:
                     ARTICLE 5. LETTERS OF CREDIT
                                      ***
§ 5—104. FORMAL REQUIREMENTS
   A letter of credit, confirmation, advice, transfer, amendment, or cancellation
may be issued in any form that is a signed record and is authenticated (i) by a
                                                                   VT LEG #383691 v.1
No. 17  Page 24 of 118
2025
signature or (ii) in accordance with the agreement of the parties or the standard
practice referred to in subsection 5—108(e) of this title.
                                       ***
§ 5—116. CHOICE OF LAW AND FORUM
   (a) The liability of an issuer, nominated person, or adviser for action or
omission is governed by the law of the jurisdiction chosen by an agreement in
the form of a record signed or otherwise authenticated by the affected parties in
the manner provided in section 5—104 of this title or by a provision in the
person’s letter of credit, confirmation, or other undertaking. The jurisdiction
whose law is chosen need not bear any relation to the transaction.
   (b) Unless subsection (a) of this section applies, the liability of an issuer,
nominated person, or adviser for action or omission is governed by the law of
the jurisdiction in which the person is located. The person is considered to be
located at the address indicated in the person’s undertaking. If more than one
address is indicated, the person is considered to be located at the address from
which the person’s undertaking was issued.
   (c) For the purpose of jurisdiction, choice of law, and recognition of
interbranch letters of credit, but not enforcement of a judgment, all branches of
a bank are considered separate juridical entities and a bank is considered to be
located at the place where its relevant branch is considered to be located under
this subsection (d) of this section.
                                                                    VT LEG #383691 v.1
No. 17  Page 25 of 118
2025
   (d) A branch of a bank is considered to be located at the address indicated
in the branch’s undertaking. If more than one address is indicated, the branch
is considered to be located at the address from which the undertaking was
issued.
   (c)(e) Except as otherwise provided in this subsection, the liability of an
issuer, nominated person, or adviser is governed by any rules of custom or
practice, such as the Uniform Customs and Practice for Documentary Credits,
to which the letter of credit, confirmation, or other undertaking is expressly
made subject. If (i) this article would govern the liability of an issuer,
nominated person, or adviser under subsection (a) or (b) of this section, (ii) the
relevant undertaking incorporates rules of custom or practice, and (iii) there is
conflict between this article and those rules as applied to that undertaking,
those rules govern except to the extent of any conflict with the nonvariable
provisions specified in subsection 5—103(c) of this title.
   (d)(f) If there is conflict between this article and Article 3, 4, 4A, or 9 of
this title, this article governs.
   (e)(g) The forum for settling disputes arising out of an undertaking within
this article may be chosen in the manner and with the binding effect that
governing law may be chosen in accordance with subsection (a) of this section.
                                       ***
                                                                     VT LEG #383691 v.1
No. 17  Page 26 of 118
2025
Sec. 7. 9A V.S.A. article 7 is amended to read:
                   ARTICLE 7. DOCUMENTS OF TITLE
                                       ***
§ 7—102. DEFINITIONS AND INDEX OF DEFINITIONS
   (a) In this article, unless the context otherwise requires:
                                       ***
      (9) “Sign” means, with present intent to authenticate or adopt a record:
         (A) to execute or adopt a tangible symbol; or
         (B) to attach to or logically associate with the record an electronic
sound, symbol, or process. [Reserved.]
                                       ***
§ 7—106. CONTROL OF ELECTRONIC DOCUMENT OF TITLE
                                       ***
   (b) A system satisfies subsection (a) of this section, and a person is deemed
to have has control of an electronic document of title, if the document is
created, stored, and assigned transferred in such a manner that:
                                       ***
      (4) copies or amendments that add or change an identified assignee
transferee of the authoritative copy can be made only with the consent of the
person asserting control;
                                       ***
   (c) A system satisfies subsection (a) of this section, and a person has
                                                                   VT LEG #383691 v.1
No. 17  Page 27 of 118
2025
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) of this
section, 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) of this section, a power is exclusive under
subdivisions (c)(3)(A) and (c)(3)(B) of this section 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.
                                                                    VT LEG #383691 v.1
No. 17  Page 28 of 118
2025
   (e) A power of a person is not shared with another person under
subdivision (d)(2) of this section 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 subdivisions (c)(3)(A) and
(c)(3)(B) of this section, 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 of this title otherwise provides, the person does not owe any duty
                                                                     VT LEG #383691 v.1
No. 17  Page 29 of 118
2025
to the other person and is not required to confirm the acknowledgment to any
other person.
                                       ***
Sec. 8. 9A V.S.A. article 8 is amended to read:
                   ARTICLE 8. INVESTMENT SECURITIES
                                       ***
§ 8—102. DEFINITIONS
   (a) In this article:
                                       ***
      (6) “Communicate” means to:
           (i) send a signed writing record; or
           (ii) transmit information by any mechanism agreed upon by the
persons transmitting and receiving the information.
                                       ***
   (b) Other The following definitions applying to in this article and the
sections in which they appear are other articles apply to this article:
Appropriate person  section 8—107
Control  section 8—106
Controllable account  section 9—102
Controllable electronic record  section 12—102
Controllable payment intangible  section 9—102
Delivery  section 8—301
                                                                    VT LEG #383691 v.1
No. 17  Page 30 of 118
2025
                                       ***
§ 8—103. RULES FOR DETERMINING WHETHER CERTAIN
             OBLIGATIONS AND INTERESTS ARE SECURITIES OR
             FINANCIAL ASSETS
                                       ***
   (h) A controllable account, controllable electronic record, or controllable
payment intangible is not a financial asset unless subdivisions 8—102(a)(9)(iii)
applies.
                                       ***
§ 8—106. CONTROL
                                       ***
   (d) A purchaser has “control” of a security entitlement if:
                                       ***
      (3) another person has control of the security entitlement on behalf of
the purchaser or, having previously acquired control of the security
entitlement, acknowledges that it has control on behalf of the purchaser, other
than the transferor to the purchaser of an interest in the security entitlement:
           (A) has control of the security entitlement and acknowledges that it
has control on behalf of the purchaser; or
           (B) obtains control of the security entitlement after having
acknowledged that it will obtain control of the security entitlement on behalf of
the purchaser.
                                                                    VT LEG #383691 v.1
No. 17  Page 31 of 118
2025
                                       ***
   (h) A person that has control under this section is not required to
acknowledge that it has control on behalf of a purchaser.
   (i) If a person acknowledges that it has or will obtain control on behalf of a
purchaser, 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
purchaser and is not required to confirm the acknowledgment to any other
person.
                                       ***
§ 8—110. APPLICABILITY; CHOICE OF LAW
                                       ***
   (g) The local law of the issuer’s jurisdiction or the securities intermediary’s
jurisdiction governs a matter or transaction specified in subsection (a) or (b) of
this section even if the matter or transaction does not bear any relation to the
jurisdiction.
                                       ***
§ 8—303. PROTECTED PURCHASER
   (a) “Protected purchaser” means a purchaser of a certificated or
uncertificated security, or of an interest therein, who:
      (1) gives value;
      (2) does not have notice of any adverse claim to the security; and
      (3) obtains control of the certificated or uncertificated security.
                                                                    VT LEG #383691 v.1
No. 17  Page 32 of 118
2025
   (b) In addition to acquiring the rights of a purchaser, a A protected
purchaser also acquires its interest in the security free of any adverse claim.
                                       ***
Sec. 9. 9A V.S.A. article 9 is amended to read:
                  ARTICLE 9. SECURED TRANSACTIONS
                                       ***
§ 9—102. DEFINITIONS AND INDEX OF DEFINITIONS
   (a) In this article:
      (1) “Accession” means goods that are physically united with other
goods in such a manner that the identity of the original goods is not lost.
      (2) “Account,” except as used in “account for,” “account statement,”
“account to,” “commodity account” in subdivision (14) of this subsection,
“customer’s account,” “deposit account” in subdivision (29) of this subsection,
“on account of,” and “statement of account,” means a right to payment of a
monetary obligation, whether or not earned by performance, (i) for property
that has been or is to be sold, leased, licensed, assigned, or otherwise disposed
of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance
issued or to be issued, (iv) for a secondary obligation incurred or to be
incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a
vessel under a charter or other contract, (vii) arising out of the use of a credit or
charge card or information contained on or for use with the card, or (viii) as
winnings in a lottery or other game of chance operated or sponsored by a state,
                                                                     VT LEG #383691 v.1
No. 17  Page 33 of 118
2025
governmental unit of a state, or person licensed or authorized to operate the
game by a state or governmental unit of a state. The term includes controllable
accounts and health-care-insurance receivables. The term does not include (i)
rights to payment evidenced by chattel paper or an instrument chattel paper,
(ii) commercial tort claims, (iii) deposit accounts, (iv) investment property, (v)
letter-of-credit rights or letters of credit, or (vi) rights to payment for money or
funds advanced or sold, other than rights arising out of the use of a credit or
charge card or information contained on or for use with the card, or (vii) rights
to payment evidenced by an instrument.
      (3) “Account debtor” means a person obligated on an account, chattel
paper, or general intangible. The term does not include persons obligated to
pay a negotiable instrument, even if the negotiable instrument constitutes part
of evidences chattel paper.
      (4) “Accounting,” except as used in “accounting for,” means a record:
          (A) authenticated signed by a secured party;
          (B) indicating the aggregate unpaid secured obligations as of a date
not more than 35 days earlier or 35 days later than the date of the record; and
          (C) identifying the components of the obligations in reasonable
detail.
                                       ***
      (7) “Authenticate” means:
          (A) to sign; or
                                                                     VT LEG #383691 v.1
No. 17  Page 34 of 118
2025
          (B) with present intent to adopt or accept a record, to attach to or
logically associate with the record an electronic sound, symbol, or process.
[Reserved.]
      (7A) “Assignee,” except as used in “assignee for benefit of creditors,”
means a person (i) in whose favor a security interest that secures an obligation
is created or provided for under a security agreement, whether or not the
obligation is outstanding or (ii) to which an account, chattel paper, payment
intangible, or promissory note has been sold. The term includes a person to
which a security interest has been transferred by a secured party.
      (7B) “Assignor” means a person that (i) under a security agreement
creates or provides for a security interest that secures an obligation or (ii) sells
an account, chattel paper, payment intangible, or promissory note. The term
includes a secured party that has transferred a security interest to another
person.
                                        ***
      (11) “Chattel paper” means a record or records that evidence both a
monetary obligation and a security interest in specific goods, a security interest
in specific goods and software used in the goods, a security interest in specific
goods and license of software used in the goods, a lease of specific goods, or a
lease of specific goods and license of software used in the goods. In this
subdivision, “monetary obligation” means a monetary obligation secured by
the goods or owed under a lease of the goods and includes a monetary
                                                                     VT LEG #383691 v.1
No. 17  Page 35 of 118
2025
obligation with respect to software used in the goods. The term does not
include:
           (A) Charters or other contracts involving the use or hire of a vessel.
           (B) Records that evidence a right to payment arising out of the use of
a credit or charge card, or information contained on or for use with the card. If
a transaction is evidenced by records that include an instrument or series of
instruments, the group of records taken together constitutes chattel paper.
      (11) “Chattel paper” means:
           (A) a right to payment of a monetary obligation secured by specific
goods, if the right to payment and security agreement are evidenced by a
record; or
           (B) a right to payment of a monetary obligation owed by a lessee
under a lease agreement with respect to specific goods and a monetary
obligation owed by the lessee in connection with the transaction giving rise to
the lease, if:
              (i) the right to payment and lease agreement are evidenced by a
record; and
              (ii) the predominant purpose of the transaction giving rise to the
lease was to give the lessee the right to possession and use of the goods.
The term does not include a right to payment arising out of a charter or other
contract involving the use or hire of a vessel or a right to payment arising out
of the use of a credit or charge card or information contained on or for use with
                                                                    VT LEG #383691 v.1
No. 17  Page 36 of 118
2025
the card.
                                          ***
      (27) “Continuation statement” means an amendment of a financing
statement which:
            (A) identifies, by its file number, the initial financing statement to
which it relates; and
            (B) indicates that it is a continuation statement for, or that it is filed
to continue the effectiveness of, the identified financing statement.
      (27A) “Controllable account” means an account evidenced by a
controllable electronic record that provides that the account debtor undertakes
to pay the person that has control under section 12—105 of this title of the
controllable electronic record.
      (27B) “Controllable payment intangible” means a payment intangible
evidenced by a controllable electronic record that provides that the account
debtor undertakes to pay the person that has control under section 12—105 of
this title of the controllable electronic record.
                                          ***
      (31) “Electronic chattel paper” means chattel paper evidenced by a
record or records consisting of information stored in an electronic medium.
[Reserved.]
      (31A) “Electronic money” means money in an electronic form.
                                          ***
                                                                        VT LEG #383691 v.1
No. 17  Page 37 of 118
2025
      (42) “General intangible” means any personal property, including things
in action, other than accounts, chattel paper, commercial tort claims, deposit
accounts, documents, goods, instruments, investment property, letter-of-credit
rights, letters of credit, money, and oil, gas, or other minerals before extraction.
The term includes controllable electronic records, payment intangibles, and
software.
                                        ***
      (47) “Instrument” means a negotiable instrument or any other writing
that evidences a right to the payment of a monetary obligation, is not itself a
security agreement or lease, and is of a type that in ordinary course of business
is transferred by delivery with any necessary indorsement or assignment. The
term does not include (i) investment property, (ii) letters of credit, or (iii)
writings that evidence a right to payment arising out of the use of a credit or
charge card or information contained on or for use with the card, or (iv)
writings that evidence chattel paper.
                                        ***
      (54A) “Money” has the meaning in subdivision 1—201(b)(24) of this
title, but does not include (i) a deposit account or (ii) money in an electronic
form that cannot be subjected to control under section 9—105A of this title.
                                        ***
                                                                      VT LEG #383691 v.1
No. 17  Page 38 of 118
2025
      (61) “Payment intangible” means a general intangible under which the
account debtor’s principal obligation is a monetary obligation. The term
includes a controllable payment intangible.
                                        ***
      (65) “Production-money crops” means crops that secure a production
money obligation incurred with respect to those crops.
      (66) “Production-money obligation” means an obligation of an obligor
incurred for new value given to enable the debtor to produce crops if the value
is in fact used for the production of the crops.
      (67) “Production of crops” includes tilling and otherwise preparing land
for growing, planting, cultivating, fertilizing, irrigating, harvesting and
gathering crops, and protecting them from damage or disease.
      (68) “Promissory note” means an instrument that evidences a promise to
pay a monetary obligation, does not evidence an order to pay, and does not
contain an acknowledgment by a bank that the bank has received for deposit a
sum of money or funds.
      (69) “Proposal” means a record authenticated signed by a secured party
which includes the terms on which the secured party is willing to accept
collateral in full or partial satisfaction of the obligation it secures pursuant to
sections 9—620, 9—621, and 9—622 of this title.
                                        ***
      (78) “Send,” in connection with a record or notification, means:
                                                                      VT LEG #383691 v.1
No. 17  Page 39 of 118
2025
         (A) to deposit in the mail, deliver for transmission, or transmit by any
other usual means of communication, with postage or cost of transmission
provided for, addressed to any address reasonable under the circumstances; or
         (B) to cause the record or notification to be received within the time
that it would have been received if properly sent under subdivision (A) of this
subdivision (78). [Reserved.]
                                        ***
      (82) “Tangible chattel paper” means chattel paper evidenced by a record
or records consisting of information that is inscribed on a tangible medium.
[Reserved.]
      (82A) “Tangible money” means money in a tangible form.
                                        ***
   (b) “Control” as provided in section 7—106 of this title and the following
definitions in other articles apply to this article:
      “Applicant” Section 5—102.
      “Beneficiary” Section 5—102.
      “Broker” Section 8—102.
      “Certificated security” Section 8—102.
      “Check” Section 3—104.
      “Clearing corporation” Section 8—102.
      “Contract for sale” Section 2—106.
      “Controllable electronic record” Section 12—102.
                                                                  VT LEG #383691 v.1
No. 17  Page 40 of 118
2025
     “Customer” Section 4—104.
     “Entitlement holder” Section 8—102.
     “Financial asset” Section 8—102.
     “Holder in due course” Section 3—302.
     “Issuer” (with respect to a letter of credit or letter-of-credit right) Section
5—102.
     “Issuer” (with respect to documents of title) Section 7—102.
     “Issuer” (with respect to a security) Section 8—201.
     “Lease” Section 2A—103.
     “Lease agreement” Section 2A—103.
     “Lease contract” Section 2A—103.
     “Leasehold interest” Section 2A—103.
     “Lessee” Section 2A—103.
     “Lessee in ordinary course of business” Section 2A—103.
     “Lessor” Section 2A—103.
     “Lessor’s residual interest” Section 2A—103.
     “Letter of credit” Section 5—102.
     “Merchant” Section 2—104.
     “Negotiable instrument” Section 3—104.
     “Nominated person” Section 5—102.
     “Note” Section 3—104.
     “Proceeds of a letter of credit” Section 5—114.
                                                                    VT LEG #383691 v.1
No. 17  Page 41 of 118
2025
      “Protected purchaser” Section 8—303.
      “Prove” Section 3—103.
      “Qualifying purchaser” Section 12—102.
      “Sale” Section 2—106.
                                      ***
§ 9—104. CONTROL OF DEPOSIT ACCOUNT
   (a) A secured party has control of a deposit account if:
      (1) the secured party is the bank with which the deposit account is
maintained;
      (2) the debtor, secured party, and bank have agreed in an authenticated a
signed record that the bank will comply with instructions originated by the
secured party directing disposition of the funds in the account without further
consent by the debtor; or
      (3) the secured party becomes the bank’s customer with respect to the
deposit account; or
      (4) another person, other than the debtor:
         (A) has control of the deposit account and acknowledges that it has
control on behalf of the secured party; or
         (B) obtains control of the deposit account after having acknowledged
that it will obtain control of the deposit account on behalf of the secured party.
                                      ***
§ 9—105. CONTROL OF ELECTRONIC CHATTEL PAPER
                                                                   VT LEG #383691 v.1
No. 17  Page 42 of 118
2025
   (a) A secured party has control of electronic chattel paper if a system
employed for evidencing the transfer of interests in the chattel paper reliably
establishes the secured party as the person to which the chattel paper was
assigned.
   (b) A system satisfies subsection (a) of this section if the record or records
comprising the chattel paper are created, stored, and assigned in such a manner
that:
        (1) a single authoritative copy of the record or records exists which is
unique, identifiable and, except as otherwise provided in subdivisions (4), (5),
and (6) of this subsection, unalterable;
        (2) the authoritative copy identifies the secured party as the assignee of
the record or records;
        (3) the authoritative copy is communicated to and maintained by the
secured party or its designated custodian;
        (4) copies or amendments that add or change an identified assignee of
the authoritative copy can be made only with the consent of the secured party;
        (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.
§ 9—105. CONTROL OF ELECTRONIC COPY OF RECORD
             EVIDENCING CHATTEL PAPER
                                                                     VT LEG #383691 v.1
No. 17  Page 43 of 118
2025
   (a) A purchaser has control of an authoritative electronic copy of a record
evidencing chattel paper if a system employed for evidencing the assignment
of interests in the chattel paper reliably establishes the purchaser as the person
to which the authoritative electronic copy was assigned.
   (b) A system satisfies subsection (a) of this section if the record or records
evidencing the chattel paper are created, stored, and assigned in a manner that:
      (1) a single authoritative copy of the record or records exists which is
unique, identifiable, and, except as otherwise provided in subdivisions (4), (5),
and (6) of this subsection, unalterable;
      (2) the authoritative copy identifies the purchaser as the assignee of the
record or records;
      (3) the authoritative copy is communicated to and maintained by the
purchaser or its designated custodian;
      (4) copies or amendments that add or change an identified assignee of
the authoritative copy can be made only with the consent of the purchaser;
      (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) of this section, and a purchaser has
control of an authoritative electronic copy of a record evidencing chattel paper,
if the electronic copy, a record attached to or logically associated with the
                                                                    VT LEG #383691 v.1
No. 17  Page 44 of 118
2025
electronic copy, or a system in which the electronic copy is recorded:
      (1) enables the purchaser readily to identify each electronic copy as
either an authoritative copy or a nonauthoritative copy;
      (2) enables the purchaser readily to identify itself in any way, including
by name, identifying number, cryptographic key, office, or account number, as
the assignee of the authoritative electronic copy; and
      (3) gives the purchaser exclusive power, subject to subsection (d) of this
section, to:
         (A) prevent others from adding or changing an identified assignee of
the authoritative electronic copy; and
         (B) transfer control of the authoritative electronic copy.
   (d) Subject to subsection (e) of this section, a power is exclusive under
subdivisions (c)(3)(A) and (B) of this section 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 authoritative
electronic copy or has a protocol 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 purchaser is not shared with another person under
subdivision (d)(2) of this section and the purchaser’s power is not exclusive if:
      (1) the purchaser can exercise the power only if the power also is
                                                                   VT LEG #383691 v.1
No. 17  Page 45 of 118
2025
exercised by the other person; and
      (2) the other person:
         (A) can exercise the power without exercise of the power by the
purchaser; or
         (B) is the transferor to the purchaser of an interest in the chattel
paper.
   (f) If a purchaser has the powers specified in subdivisions (c)(3)(A) and (B)
of this section, the powers are presumed to be exclusive.
   (g) A purchaser has control of an authoritative electronic copy of a record
evidencing chattel paper if another person, other than the transferor to the
purchaser of an interest in the chattel paper:
      (1) has control of the authoritative electronic copy and acknowledges
that it has control on behalf of the purchaser; or
      (2) obtains control of the authoritative electronic copy after having
acknowledged that it will obtain control of the electronic copy on behalf of the
purchaser.
§ 9—105A. CONTROL OF ELECTRONIC MONEY
   (a) A person has control of electronic money if:
      (1) the electronic money, a record attached to or logically associated
with the electronic money, or a system in which the electronic money is
recorded gives the person:
         (A) power to avail itself of substantially all the benefit from the
                                                                    VT LEG #383691 v.1
No. 17  Page 46 of 118
2025
electronic money; and
         (B) exclusive power, subject to subsection (b) of this section, to:
            (i) prevent others from availing themselves of substantially all the
benefit from the electronic money; and
            (ii) transfer control of the electronic money to another person or
cause another person to obtain control of other electronic money as a result of
the transfer of the electronic money; and
      (2) the electronic money, a record attached to or logically associated
with the electronic money, or a system in which the electronic money is
recorded enables the person readily to identify itself in any way, including by
name, identifying number, cryptographic key, office, or account number, as
having the powers under subdivision (1) of this subsection.
   (b) Subject to subsection (c) of this section, a power is exclusive under
subdivisions (a)(1)(B)(i) and (ii) of this section even if:
      (1) the electronic money, a record attached to or logically associated
with the electronic money, or a system in which the electronic money is
recorded limits the use of the electronic money or has a protocol programmed
to cause a change, including a transfer or loss of control; or
      (2) the power is shared with another person.
   (c) A power of a person is not shared with another person under
subdivision (b)(2) of this section and the person’s power is not exclusive if:
      (1) the person can exercise the power only if the power also is exercised
                                                                   VT LEG #383691 v.1
No. 17  Page 47 of 118
2025
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 electronic
money.
   (d) If a person has the powers specified in subdivisions (a)(1)(B)(i) and (ii)
of this section, the powers are presumed to be exclusive.
   (e) A person has control of electronic money if another person, other than
the transferor to the person of an interest in the electronic money:
      (1) has control of the electronic money and acknowledges that it has
control on behalf of the person; or
      (2) obtains control of the electronic money after having acknowledged
that it will obtain control of the electronic money on behalf of the person.
                                      ***
§ 9—107A. CONTROL OF CONTROLLABLE ELECTRONIC RECORD,
              CONTROLLABLE ACCOUNT, OR CONTROLLABLE
              PAYMENT INTANGIBLE
   (a) A secured party has control of a controllable electronic record as
provided in section 12—105 of this title.
   (b) A secured party has control of a controllable account or controllable
payment intangible if the secured party has control of the controllable
                                                                    VT LEG #383691 v.1
No. 17  Page 48 of 118
2025
electronic record that evidences the controllable account or controllable
payment intangible.
§ 9—107B. NO REQUIREMENT TO ACKNOWLEDGE OR CONFIRM;
              NO DUTIES
   (a) A person that has control under section 9—104, 9—105, or 9—105A of
this title is not required to acknowledge that it has control on behalf of another
person.
   (b) 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
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.
                                          ***
§ 9—203. ATTACHMENT AND ENFORCEABILITY OF SECURITY
            INTEREST; PROCEEDS; SUPPORTING OBLIGATIONS;
            FORMAL REQUISITES
   (a) A security interest attaches to collateral when it becomes enforceable
against the debtor with respect to the collateral, unless an agreement expressly
postpones the time of attachment.
   (b) Except as otherwise provided in subsections (c) through (i) of this
section, a security interest is enforceable against the debtor and third parties
with respect to the collateral only if:
                                                                    VT LEG #383691 v.1
No. 17  Page 49 of 118
2025
      (1) value has been given;
      (2) the debtor has rights in the collateral or the power to transfer rights
in the collateral to a secured party; and
      (3) one of the following conditions is met:
         (A) the debtor has authenticated signed a security agreement that
provides a description of the collateral and, if the security interest covers
timber to be cut, a description of the land concerned;
         (B) the collateral is not a certificated security and is in the possession
of the secured party under section 9—313 of this title pursuant to the debtor’s
security agreement;
         (C) the collateral is a certificated security in registered form and the
security certificate has been delivered to the secured party under section 8-301
of this title pursuant to the debtor’s security agreement; or
         (D) the collateral is controllable accounts, controllable electronic
records, controllable payment intangibles, deposit accounts, electronic chattel
paper, electronic documents, electronic money, investment property, or letter-
of-credit rights, or electronic documents, and the secured party has control
under section 7—106, 9—104, 9—105, 9-105A, 9—106, or 9—107, or 9-
107A of this title pursuant to the debtor’s security agreement; or
         (E) the collateral is chattel paper and the secured party has possession
and control under section 9-314A of this title pursuant to the debtor’s security
agreement.
                                                                     VT LEG #383691 v.1
No. 17  Page 50 of 118
2025
                                      ***
§ 9—204. AFTER-ACQUIRED PROPERTY; FUTURE ADVANCES
   (a) Except as otherwise provided in subsection (b) of this section, a security
agreement may create or provide for a security interest in after-acquired
collateral.
   (b) A Subject to subsection (b.1) of this section, a security interest does not
attach under a term constituting an after-acquired property clause to:
       (1) consumer goods, other than an accession when given as additional
security, unless the debtor acquires rights in them within 10 days after the
secured party gives value; or
       (2) a commercial tort claim.
   (b.1) Subsection (b) of this section does not prevent a security interest from
attaching:
       (1) to consumer goods as proceeds under subsection 9-315(a) of this title
or commingled goods under subsection 9-336(c) of this title;
       (2) to a commercial tort claim as proceeds under subsection 9-315(a) of
this title; or
       (3) under an after-acquired property clause to property that is proceeds
of consumer goods or a commercial tort claim.
                                      ***
                                                                   VT LEG #383691 v.1
No. 17  Page 51 of 118
2025
§ 9—207. RIGHTS AND DUTIES OF SECURED PARTY HAVING
            POSSESSION OR CONTROL OF COLLATERAL
                                      ***
   (c) Except as otherwise provided in subsection (d) of this section, a secured
party having possession of collateral or control of collateral under section 7—
106, 9—104, 9—105, 9-105A, 9-106, or 9-107, or 9-107A of this title:
                                      ***
§ 9—208. ADDITIONAL DUTIES OF SECURED PARTY HAVING
            CONTROL OF COLLATERAL
                                      ***
   (b) Within 10 days after receiving an authenticated a signed demand by the
debtor:
      (1) a secured party having control of a deposit account under
subdivision 9—104(a)(2) of this title shall send to the bank with which the
deposit account is maintained an authenticated statement a signed record that
releases the bank from any further obligation to comply with instructions
originated by the secured party;
                                      ***
      (3) a secured party, other than a buyer, having control of electronic
chattel paper under section 9—105 of this title shall:
          (A) communicate the authoritative copy of the electronic chattel paper
to the debtor or its designated custodian;
                                                                  VT LEG #383691 v.1
No. 17  Page 52 of 118
2025
         (B) if the debtor designates a custodian that is the designated
custodian with which the authoritative copy of the electronic chattel paper is
maintained for the secured party, communicate to the custodian an
authenticated record releasing the designated custodian from any further
obligation to comply with instructions originated by the secured party and
instructing the custodian to comply with instructions originated by the debtor;
and
         (C) take appropriate action to enable the debtor or its designated
custodian to make copies of or revisions to the authoritative copy which add or
change an identified assignee of the authoritative copy without the consent of
the secured party a secured party, other than a buyer, having control under
section 9-105 of this title of an authoritative electronic copy of a record
evidencing chattel paper shall transfer control of the electronic copy to the
debtor or a person designated by the debtor;
      (4) a secured party having control of investment property under
subdivision 8—106(d)(2) or subsection 9—106(b) of this title shall send to the
securities intermediary or commodity intermediary with which the security
entitlement or commodity contract is maintained an authenticated a signed
record that releases the securities intermediary or commodity intermediary
from any further obligation to comply with entitlement orders or directions
originated by the secured party;
                                                                    VT LEG #383691 v.1
No. 17  Page 53 of 118
2025
      (5) a secured party having control of a letter-of-credit right under section
9-107 of this title shall send to each person having an unfulfilled obligation to
pay or deliver proceeds of the letter of credit to the secured party an
authenticated a signed release from any further obligation to pay or deliver
proceeds of the letter of credit to the secured party; and
      (6) a secured party having control of an electronic document shall:
          (A) give control of the electronic document to the debtor or its
designated custodian
          (B) if the debtor designates a custodian that is the designated
custodian with which the authoritative copy of the electronic document is
maintained for the secured party, communicate to the custodian an
authenticated record releasing the designated custodian from any further
obligation to comply with instructions originated by the secured party and
instructing the custodian to comply with instructions originated by the debtor;
and
          (C) take appropriate action to enable the debtor or its designated
custodian to make copies of or revisions to the authoritative copy which add or
change an identified assignee of the authoritative copy without the consent of
the secured party a secured party having control under section 7—106 of this
title of an authoritative electronic copy of an electronic document shall transfer
control of the electronic copy to the debtor or a person designated by the
debtor;
                                                                   VT LEG #383691 v.1
No. 17  Page 54 of 118
2025
      (7) a secured party having control under section 9-105A of this title of
electronic money shall transfer control of the electronic money to the debtor or
a person designated by the debtor; and
      (8) a secured party having control under section 12-105 of this title of a
controllable electronic record, other than a buyer of a controllable account or
controllable payment intangible evidenced by the controllable electronic
record, shall transfer control of the controllable electronic record to the debtor
or a person designated by the debtor.
§ 9—209. DUTIES OF SECURED PARTY IF ACCOUNT DEBTOR HAS
           BEEN NOTIFIED OF ASSIGNMENT
                                        ***
   (b) Within 10 days after receiving an authenticated a signed demand by the
debtor, a secured party shall send to an account debtor that has received
notification under subsection 9-406(a) or 12-106(b) of this title of an
assignment to the secured party as assignee under subsection 9—406(a) of this
title an authenticated a signed record that releases the account debtor from any
further obligation to the secured party.
                                        ***
§ 9—210. REQUEST FOR ACCOUNTING; REQUEST REGARDING LIST
           OF COLLATERAL OR STATEMENT OF ACCOUNT
   (a) In this section:
                                                                    VT LEG #383691 v.1
No. 17  Page 55 of 118
2025
      (1) “Request” means a record of a type described in subdivision (2), (3),
or (4) of this subsection.
      (2) “Request for an accounting” means a record authenticated signed by
a debtor requesting that the recipient provide an accounting of the unpaid
obligations secured by collateral and reasonably identifying the transaction or
relationship that is the subject of the request.
      (3) “Request regarding a list of collateral” means a record authenticated
signed by a debtor requesting that the recipient approve or correct a list of what
the debtor believes to be the collateral securing an obligation and reasonably
identifying the transaction or relationship that is the subject of the request.
      (4) “Request regarding a statement of account” means a record
authenticated signed by a debtor requesting that the recipient approve or
correct a statement indicating what the debtor believes to be the aggregate
amount of unpaid obligations secured by collateral as of a specified date and
reasonably identifying the transaction or relationship that is the subject of the
request.
   (b) Subject to subsections (c), (d), (e), and (f) of this section, a secured
party, other than a buyer of accounts, chattel paper, payment intangibles, or
promissory notes or a consignor, shall comply with a request within 14 days
after receipt:
      (1) in the case of a request for an accounting, by authenticating signing
and sending to the debtor an accounting; and
                                                                     VT LEG #383691 v.1
No. 17  Page 56 of 118
2025
      (2) in the case of a request regarding a list of collateral or a request
regarding a statement of account, by authenticating signing and sending to the
debtor an approval or correction.
   (c) A secured party that claims a security interest in all of a particular type
of collateral owned by the debtor may comply with a request regarding a list of
collateral by sending to the debtor an authenticated a signed record including a
statement to that effect within 14 days after receipt.
   (d) A person that receives a request regarding a list of collateral, claims no
interest in the collateral when it receives the request, and claimed an interest in
the collateral at an earlier time shall comply with the request within 14 days
after receipt by sending to the debtor an authenticated a signed record:
      (1) disclaiming any interest in the collateral; and
      (2) if known to the recipient, providing the name and mailing address of
any assignee of or successor to the recipient’s interest in the collateral.
   (e) A person that receives a request for an accounting or a request regarding
a statement of account, claims no interest in the obligations when it receives
the request, and claimed an interest in the obligations at an earlier time shall
comply with the request within 14 days after receipt by sending to the debtor
an authenticated a signed record:
                                       ***
§ 9—301. LAW GOVERNING PERFECTION AND PRIORITY OF
           SECURITY INTERESTS
                                                                     VT LEG #383691 v.1
No. 17  Page 57 of 118
2025
   Except as otherwise provided in sections 9—303 through 9—306 9—306B
of this title, the following rules determine the law governing perfection, the
effect of perfection or nonperfection, and the priority of a security interest in
collateral:
                                       ***
      (3) Except as otherwise provided in subdivision (4) of this section, while
tangible negotiable tangible documents, goods, instruments, or tangible money,
or tangible chattel paper is located in a jurisdiction, the local law of that
jurisdiction governs:
          (A) perfection of a security interest in the goods by filing a fixture
filing;
          (B) perfection of a security interest in timber to be cut; and
          (C) the effect of perfection or nonperfection and the priority of a
nonpossessory security interest in the collateral.
                                       ***
§ 9—304. LAW GOVERNING PERFECTION AND PRIORITY OF
              SECURITY INTERESTS IN DEPOSIT ACCOUNTS
   (a) The local law of a bank’s jurisdiction governs perfection, the effect of
perfection or nonperfection, and the priority of a security interest in a deposit
account maintained with that bank even if the transaction does not bear any
relation to the bank’s jurisdiction.
                                       ***
                                                                     VT LEG #383691 v.1
No. 17  Page 58 of 118
2025
§ 9—305. LAW GOVERNING PERFECTION AND PRIORITY OF
           SECURITY INTERESTS IN INVESTMENT PROPERTY
   (a) Except as otherwise provided in subsection (c) of this section, the
following rules apply:
                                       ***
      (5) Subdivisions (2), (3), and (4) of this subsection apply even if the
transaction does not bear any relation to the jurisdiction.
                                       ***
§ 9—306. LAW GOVERNING PERFECTION AND PRIORITY OF
           SECURITY INTERESTS IN LETTER-OF-CREDIT RIGHTS
                                       ***
§ 9-306A. LAW GOVERNING PERFECTION AND PRIORITY OF
           SECURITY INTERESTS IN CHATTEL PAPER
   (a) Except as provided in subsection (d) of this section, if chattel paper is
evidenced only by an authoritative electronic copy of the chattel paper or is
evidenced by an authoritative electronic copy and an authoritative tangible
copy, the local law of the chattel paper’s jurisdiction governs perfection, the
effect of perfection or nonperfection, and the priority of a security interest in
the chattel paper, even if the transaction does not bear any relation to the
chattel paper’s jurisdiction.
   (b) The following rules determine the chattel paper’s jurisdiction under this
section:
                                                                    VT LEG #383691 v.1
No. 17  Page 59 of 118
2025
      (1) If the authoritative electronic copy of the record evidencing chattel
paper, or a record attached to or logically associated with the electronic copy
and readily available for review, expressly provides that a particular
jurisdiction is the chattel paper’s jurisdiction for purposes of this section, this
article, or the Uniform Commercial Code, that jurisdiction is the chattel
paper’s jurisdiction.
      (2) If subdivision (1) of this subsection does not apply and the rules of
the system in which the authoritative electronic copy is recorded are readily
available for review and expressly provide that a particular jurisdiction is the
chattel paper’s jurisdiction for purposes of this part, this article, or the Uniform
Commercial Code, that jurisdiction is the chattel paper’s jurisdiction.
      (3) If subdivisions (1) and (2) of this subsection do not apply and the
authoritative electronic copy, or a record attached to or logically associated
with the electronic copy and readily available for review, expressly provides
that the chattel paper is governed by the law of a particular jurisdiction, that
jurisdiction is the chattel paper’s jurisdiction.
      (4) If subdivisions (1), (2), and (3) of this subsection do not apply and
the rules of the system in which the authoritative electronic copy is recorded
are readily available for review and expressly provide that the chattel paper or
the system is governed by the law of a particular jurisdiction, that jurisdiction
is the chattel paper’s jurisdiction.
      (5) If subdivisions (1) through (4) of this subsection do not apply, the
                                                                     VT LEG #383691 v.1
No. 17  Page 60 of 118
2025
chattel paper’s jurisdiction is the jurisdiction in which the debtor is located.
   (c) If an authoritative tangible copy of a record evidences chattel paper and
the chattel paper is not evidenced by an authoritative electronic copy, while the
authoritative tangible copy of the record evidencing chattel paper is located in
a jurisdiction, the local law of that jurisdiction governs:
      (1) perfection of a security interest in the chattel paper by possession
under section 9-314A of this title; and
      (2) the effect of perfection or nonperfection and the priority of a security
interest in the chattel paper.
   (d) The local law of the jurisdiction in which the debtor is located governs
perfection of a security interest in chattel paper by filing.
§ 9-306B. LAW GOVERNING PERFECTION AND PRIORITY OF
            SECURITY INTERESTS IN CONTROLLABLE ACCOUNTS,
            CONTROLLABLE ELECTRONIC RECORDS, AND
            CONTROLLABLE PAYMENT INTANGIBLES
   (a) Except as provided in subsection (b) of this section, the local law of the
controllable electronic record’s jurisdiction specified in subsections 12-107(c)
and (d) of this title governs perfection, the effect of perfection or
nonperfection, and the priority of a security interest in a controllable electronic
record and a security interest in a controllable account or controllable payment
intangible evidenced by the controllable electronic record.
   (b) The local law of the jurisdiction in which the debtor is located governs:
                                                                        VT LEG #383691 v.1
No. 17  Page 61 of 118
2025
      (1) perfection of a security interest in a controllable account,
controllable electronic record, or controllable payment intangible by filing; and
      (2) automatic perfection of a security interest in a controllable payment
intangible created by a sale of the controllable payment intangible.
                                      ***
§ 9—310. WHEN FILING REQUIRED TO PERFECT SECURITY
            INTEREST OR AGRICULTURAL LIEN; SECURITY
            INTERESTS AND AGRICULTURAL LIENS TO WHICH
            FILING PROVISIONS DO NOT APPLY
                                      ***
   (b) The filing of a financing statement is not necessary to perfect a security
interest:
                                      ***
      (8) in controllable accounts, controllable electronic records, controllable
payment intangibles, deposit accounts, electronic chattel paper, electronic
documents, investment property, or letter-of-credit rights which is perfected by
control under section 9—314 of this title;
      (8.1) in chattel paper which is perfected by possession and control under
section 9-314A of this title;
      (9) in proceeds which is perfected under section 9—315 of this title; or
                                      ***
                                                                   VT LEG #383691 v.1
No. 17  Page 62 of 118
2025
§ 9—312. PERFECTION OF SECURITY INTERESTS IN CHATTEL
             PAPER, CONTROLLABLE ACCOUNTS, CONTROLLABLE
             ELECTRONIC RECORDS, CONTROLLABLE PAYMENT
             INTANGIBLES, DEPOSIT ACCOUNTS, NEGOTIABLE
             DOCUMENTS, GOODS COVERED BY DOCUMENTS,
             INSTRUMENTS, INVESTMENT PROPERTY, LETTER-OF-
             CREDIT RIGHTS, AND MONEY; PERFECTION BY
             PERMISSIVE FILING; TEMPORARY PERFECTION
             WITHOUT FILING OR TRANSFER OF POSSESSION
   (a) A security interest in chattel paper, negotiable documents, controllable
accounts, controllable electronic records, controllable payment intangibles,
instruments, or investment property, or negotiable documents may be perfected
by filing.
   (b) Except as otherwise provided in subsections 9—315(c) and (d) of this
title for proceeds:
                                       ***
      (2) and except as otherwise provided in subsection 9—308(d) of this
title, a security interest in a letter-of-credit right may be perfected only by
control under section 9—314 of this title; and
      (3) a security interest in tangible money may be perfected only by the
secured party’s taking possession under section 9—313 of this title; and
                                                                     VT LEG #383691 v.1
No. 17  Page 63 of 118
2025
       (4) a security interest in electronic money may be perfected only by
control under section 9—314 of this title.
                                       ***
   (e) A security interest in certificated securities, negotiable documents, or
instruments is perfected without filing or the taking of possession or control for
a period of 20 days from the time it attaches to the extent that it arises for new
value given under an authenticated a signed security agreement.
                                       ***
§ 9—313. WHEN POSSESSION BY OR DELIVERY TO SECURED
             PARTY PERFECTS SECURITY INTEREST WITHOUT FILING
   (a) Perfection by possession or delivery. Except as otherwise provided in
subsection (b) of this section, a secured party may perfect a security interest in
tangible negotiable documents, goods, instruments, negotiable tangible
documents, or tangible money, or tangible chattel paper by taking possession
of the collateral. A secured party may perfect a security interest in certificated
securities by taking delivery of the certificated securities under section 8—301
of this title.
                                       ***
   (c) With respect to collateral other than certificated securities and goods
covered by a document, a secured party takes possession of collateral in the
possession of a person other than the debtor, the secured party, or a lessee of
                                                                    VT LEG #383691 v.1
No. 17  Page 64 of 118
2025
the collateral from the debtor in the ordinary course of the debtor’s business,
when:
       (1) the person in possession authenticates signs a record acknowledging
that it holds possession of the collateral for the secured party’s benefit; or
       (2) the person takes possession of the collateral after having
authenticated signed a record acknowledging that it will hold possession of the
collateral for the secured party’s benefit.
   (d) If perfection of a security interest depends upon possession of the
collateral by a secured party, perfection occurs no not earlier than the time the
secured party takes possession and continues only while the secured party
retains possession.
                                       ***
§ 9—314. PERFECTION BY CONTROL
   (a) A security interest in investment property, deposit accounts, letter-of-
credit rights, electronic chattel paper, or electronic documents controllable
accounts, controllable electronic records, controllable payment intangibles,
deposit accounts, electronic documents, electronic money, investment
property, or letter-of-credit rights may be perfected by control of the collateral
under section 7—106, 9—104, 9-105, 9-105A, 9-106, or 9-107, or 9-107A of
this title.
   (b) A security interest in deposit accounts, electronic chattel paper, letter-
of-credit rights, or electronic documents controllable accounts, controllable
                                                                    VT LEG #383691 v.1
No. 17  Page 65 of 118
2025
electronic records, controllable payment intangibles, deposit accounts,
electronic documents, electronic money, or letter-of-credit rights is perfected
by control under section 7—106, 9—104, 9-105, or 9—105A, 9-107, or 9—
107A of this title when not earlier than the time the secured party obtains
control and remains perfected by control only while the secured party retains
control.
   (c) A security interest in investment property is perfected by control under
section 9—106 of this title from not earlier than the time the secured party
obtains control and remains perfected by control until:
                                        ***
§ 9—314A. PERFECTION BY POSSESSION AND CONTROL OF
             CHATTEL PAPER
   (a) A secured party may perfect a security interest in chattel paper by
taking possession of each authoritative tangible copy of the record evidencing
the chattel paper and obtaining control of each authoritative electronic copy of
the electronic record evidencing the chattel paper.
   (b) A security interest is perfected under subsection (a) of this section not
earlier than the time the secured party takes possession and obtains control and
remains perfected under subsection (a) of this section only while the secured
party retains possession and control.
                                                                   VT LEG #383691 v.1
No. 17  Page 66 of 118
2025
   (c) Subsections 9—313(c) and (f)–(i) of this title apply to perfection by
possession of an authoritative tangible copy of a record evidencing chattel
paper.
                                       ***
§ 9—316. EFFECT OF CHANGE IN GOVERNING LAW
   (a) A security interest perfected pursuant to the law of the jurisdiction
designated in subdivision 9—301(1) or in subsection 9—305(c), 9—306A(d),
or 9—306B(b) of this title remains perfected until the earliest of:
                                       ***
   (f) A security interest in chattel paper, controllable accounts, controllable
electronic records, controllable payment intangibles, deposit accounts, letter-
of-credit rights, or investment property which is perfected under the law of the
chattel paper’s jurisdiction, the controllable electronic record’s jurisdiction, the
bank’s jurisdiction, the issuer’s jurisdiction, a nominated person’s jurisdiction,
the securities intermediary’s jurisdiction, or the commodity intermediary’s
jurisdiction, as applicable, remains perfected until the earlier of:
                                       ***
§ 9—317. INTERESTS THAT TAKE PRIORITY OVER OR TAKE FREE
           OF SECURITY INTEREST OR AGRICULTURAL LIEN
                                       ***
   (b) Except as otherwise provided in subsection (e) of this section, a buyer,
other than a secured party, of tangible chattel paper, tangible documents, of
                                                                       VT LEG #383691 v.1
No. 17  Page 67 of 118
2025
goods, instruments, tangible documents, or a certificated security takes free of
a security interest or agricultural lien if the buyer gives value and receives
delivery of the collateral without knowledge of the security interest or
agricultural lien and before it is perfected.
                                        ***
   (d) A Subject to subsections (f)–(i) of this section, a licensee of a general
intangible or a buyer, other than a secured party, of accounts, electronic chattel
paper, electronic documents, general intangibles, or investment property other
than a certificated security collateral other than electronic money, goods,
instruments, tangible documents, or a certified security takes free of a security
interest if the licensee or buyer gives value without knowledge of the security
interest and before it is perfected.
                                        ***
   (f) A buyer, other than a secured party, of chattel paper takes free of a
security interest if, without knowledge of the security interest and before it is
perfected, the buyer gives value and:
      (1) receives delivery of each authoritative tangible copy of the record
evidencing the chattel paper; and
      (2) if each authoritative electronic copy of the record evidencing the
chattel paper can be subjected to control under section 9-105 of this title,
obtains control of each authoritative electronic copy.
   (g) A buyer of an electronic document takes free of a security interest if,
                                                                    VT LEG #383691 v.1
No. 17  Page 68 of 118
2025
without knowledge of the security interest and before it is perfected, the buyer
gives value and, if each authoritative electronic copy of the document can be
subjected to control under section 7-106 of this title, obtains control of each
authoritative electronic copy.
   (h) A buyer of a controllable electronic record takes free of a security
interest if, without knowledge of the security interest and before it is perfected,
the buyer gives value and obtains control of the controllable electronic record.
   (i) A buyer, other than a secured party, of a controllable account or a
controllable payment intangible takes free of a security interest if, without
knowledge of the security interest and before it is perfected, the buyer gives
value and obtains control of the controllable account or controllable payment
intangible.
                                       ***
§ 9—323. FUTURE ADVANCES
                                       ***
   (d) Except as otherwise provided in subsection (e) of this section, a buyer
of goods other than a buyer in ordinary course of business takes free of a
security interest to the extent that it secures advances made after the earlier of:
                                       ***
   (f) Except as otherwise provided in subsection (g) of this section, a lessee
of goods, other than a lessee in ordinary course of business, takes the leasehold
                                                                    VT LEG #383691 v.1
No. 17  Page 69 of 118
2025
interest free of a security interest to the extent that it secures advances made
after the earlier of:
                                        ***
§ 9—324. PRIORITY OF PURCHASE-MONEY SECURITY INTERESTS
                                        ***
   (b) Subject to subsection (c) of this section and except as otherwise
provided in subsection (g) of this section, a perfected purchase-money security
interest in inventory has priority over a conflicting security interest in the same
inventory, has priority over a conflicting security interest in chattel paper or an
instrument constituting proceeds of the inventory and in proceeds of the chattel
paper, if so provided in section 9—330 of this title, and, except as otherwise
provided in section 9—327 of this title, also has priority in identifiable cash
proceeds of the inventory to the extent the identifiable cash proceeds are
received on or before the delivery of the inventory to a buyer, if:
      (1) the purchase-money security interest is perfected when the debtor
receives possession of the inventory;
      (2) the purchase-money secured party sends an authenticated a signed
notification to the holder of the conflicting security interest;
                                        ***
   (d) Subject to subsection (e) of this section and except as otherwise
provided in subsection (g) of this section, a perfected purchase-money security
interest in livestock that are farm products has priority over a conflicting
                                                                      VT LEG #383691 v.1
No. 17  Page 70 of 118
2025
security interest in the same livestock, and, except as otherwise provided in
section 9—327 of this title, a perfected security interest in their identifiable
proceeds and identifiable products in their unmanufactured states also has
priority, if:
       (1) the purchase-money security interest is perfected when the debtor
receives possession of the livestock;
       (2) the purchase-money secured party sends an authenticated a signed
notification to the holder of the conflicting security interest;
                                        ***
§ 9—324A. PRIORITY OF PRODUCTION-MONEY SECURITY
                INTERESTS AND AGRICULTURAL LIENS
   (a) Except as otherwise provided in subsections (c), (d), and (e) of this
section, if the requirements of subsection (b) of this section are satisfied, a
perfected production-money security interest in production-money crops has
priority over a conflicting security interest in the same crops and, except as
otherwise provided in section 9—327 of this title, also has priority in their
identifiable proceeds.
   (b) A production-money security interest has priority under subsection (a)
of this section if:
       (1) the production-money security interest is perfected by filing when
the production-money secured party first gives new value to enable the debtor
to produce the crops;
                                                                     VT LEG #383691 v.1
No. 17  Page 71 of 118
2025
      (2) the production-money secured party sends an authenticated
notification to the holder of the conflicting security interest not less than 10 or
more than 30 days before the production-money secured party first gives new
value to enable the debtor to produce the crops if the holder had filed a
financing statement covering the crops before the date of the filing made by the
production-money secured party; and
      (3) the notification states that the production-money secured party has or
expects to acquire a production-money security interest in the debtor’s crops
and provides a description of the crops.
   (c) Except as otherwise provided in subsection (d) or (e) of this section, if
more than one security interest qualifies for priority in the same collateral
under subsection (a) of this section, the security interests rank according to
priority in time of filing under subsection 9—322(a) of this title.
   (d) To the extent that a person holding a perfected security interest in
production-money crops that are the subject of a production-money security
interest gives new value to enable the debtor to produce the production-money
crops and the value is in fact used for the production of the production-money
crops, the security interests rank according to priority in time of filing under
subsection 9—322(a) of this title.
   (e) To the extent that a person holds both an agricultural lien and a
production-money security interest in the same collateral securing the same
obligations, the rules of priority applicable to agricultural liens govern priority.
                                                                      VT LEG #383691 v.1
No. 17  Page 72 of 118
2025
                                      ***
§ 9—326. PRIORITY OF SECURITY INTERESTS CREATED BY NEW
            DEBTOR
                                      ***
§ 9—326A. PRIORITY OF SECURITY INTEREST IN CONTROLLABLE
              ACCOUNT, CONTROLLABLE ELECTRONIC RECORD,
              AND CONTROLLABLE PAYMENT INTANGIBLE
   A security interest in a controllable account, controllable electronic record,
or controllable payment intangible held by a secured party having control of
the account, electronic record, or payment intangible has priority over a
conflicting security interest held by a secured party that does not have control.
                                      ***
§ 9—330. PRIORITY OF PURCHASER OF CHATTEL PAPER OR
            INSTRUMENT
   (a) A purchaser of chattel paper has priority over a security interest in the
chattel paper which is claimed merely as proceeds of inventory subject to a
security interest if:
      (1) in good faith and in the ordinary course of the purchaser’s business,
the purchaser gives new value and, takes possession of each authoritative
tangible copy of the record evidencing the chattel paper or, and obtains control
of under section 9—105 of this title of each authoritative electronic copy of the
record evidencing the chattel paper under section 9—105 of this title; and
                                                                   VT LEG #383691 v.1
No. 17  Page 73 of 118
2025
      (2) the chattel paper does authoritative copies of the record evidencing
the chattel paper do not indicate that it the chattel paper has been assigned to
an identified assignee other than the purchaser.
   (b) A purchaser of chattel paper has priority over a security interest in the
chattel paper which is claimed other than merely as proceeds of inventory
subject to a security interest if the purchaser gives new value and, takes
possession of each authoritative tangible copy of the record evidencing the
chattel paper or, and obtains control of under section 9—105 of this title of
each authoritative electronic copy of the record evidencing the chattel paper
under section 9—105 of this title in good faith, in the ordinary course of the
purchaser’s business, and without knowledge that the purchase violates the
rights of the secured party.
                                      ***
   (f) For purposes of subsections (b) and (d) of this section, if the
authoritative copies of the record evidencing chattel paper or an instrument
indicates indicate that it the chattel paper or instrument has been assigned to an
identified secured party other than the purchaser, a purchaser of the chattel
paper or instrument has knowledge that the purchase violates the rights of the
secured party.
§ 9—331. PRIORITY OF RIGHTS OF PURCHASERS OF INSTRUMENTS,
           CONTROLLABLE ACCOUNTS, CONTROLLABLE
           ELECTRONIC RECORDS, CONTROLLABLE PAYMENT
                                                                   VT LEG #383691 v.1
No. 17  Page 74 of 118
2025
            INTANGIBLES, DOCUMENTS, INSTRUMENTS, AND
            SECURITIES UNDER OTHER ARTICLES; PRIORITY OF
            INTERESTS IN FINANCIAL ASSETS AND SECURITY
            ENTITLEMENTS AND PROTECTION AGAINST ASSERTION
            OF CLAIM UNDER ARTICLE ARTICLES 8 AND 12
   (a) This article does not limit the rights of a holder in due course of a
negotiable instrument, a holder to which a negotiable document of title has
been duly negotiated, or a protected purchaser of a security, or a qualifying
purchaser of a controllable account, controllable electronic record, or
controllable payment intangible. These holders or purchasers take priority
over an earlier security interest, even if perfected, to the extent provided in
Articles 3, 7, and 8, and 12 of this title.
   (b) This article does not limit the rights of or impose liability on a person to
the extent that the person is protected against the assertion of an adverse claim
under Article 8 or 12 of this title.
                                        ***
§ 9—332. TRANSFER OF MONEY; TRANSFER OF FUNDS FROM
            DEPOSIT ACCOUNT
   (a) A transferee of tangible money takes the money free of a security
interest unless the transferee acts if the transferee receives possession of the
money without acting in collusion with the debtor in violating the rights of the
secured party.
                                                                    VT LEG #383691 v.1
No. 17  Page 75 of 118
2025
   (b) A transferee of funds from a deposit account takes the funds free of a
security interest in the deposit account unless the transferee acts if the
transferee receives the funds without acting in collusion with the debtor in
violating the rights of the secured party.
   (c) A transferee of electronic money takes the money free of a security
interest if the transferee obtains control of the money without acting in
collusion with the debtor in violating the rights of the secured party.
                                       ***
§ 9—334. PRIORITY OF SECURITY INTERESTS IN FIXTURES AND
               CROPS
                                       ***
   (f) A security interest in fixtures, whether or not perfected, has priority over
a conflicting interest of an encumbrancer or owner of the real property if:
      (1) the encumbrancer or owner has, in an authenticated a signed record,
consented to the security interest or disclaimed an interest in the goods as
fixtures; or
                                       ***
§ 9—341. BANK’S RIGHTS AND DUTIES WITH RESPECT TO
               DEPOSIT ACCOUNT
   Except as otherwise provided in subsection 9—340(c) of this title, and
unless the bank otherwise agrees in an authenticated a signed record, a bank’s
                                                                    VT LEG #383691 v.1
No. 17  Page 76 of 118
2025
rights and duties with respect to a deposit account maintained with the bank are
not terminated, suspended, or modified by:
                                       ***
§ 9—404. RIGHTS ACQUIRED BY ASSIGNEE; CLAIMS AND
            DEFENSES AGAINST ASSIGNEE
   (a) Unless an account debtor has made an enforceable agreement not to
assert defenses or claims, and subject to subsections (b) through (e) of this
section, the rights of an assignee are subject to:
      (1) all terms of the agreement between the account debtor and assignor
and any defense or claim in recoupment arising from the transaction that gave
rise to the contract; and
      (2) any other defense or claim of the account debtor against the assignor
which accrues before the account debtor receives a notification of the
assignment authenticated signed by the assignor or the assignee.
                                       ***
§ 9—406. DISCHARGE OF ACCOUNT DEBTOR; NOTIFICATION OF
            ASSIGNMENT; IDENTIFICATION AND PROOF OF
            ASSIGNMENT; RESTRICTIONS ON ASSIGNMENT OF
            ACCOUNTS, CHATTEL PAPER, PAYMENT INTANGIBLES,
            AND PROMISSORY NOTES INEFFECTIVE
   (a) Subject to subsections (b) through (h)(i) and (l) of this section, an
account debtor on an account, chattel paper, or a payment intangible may
                                                                   VT LEG #383691 v.1
No. 17  Page 77 of 118
2025
discharge its obligation by paying the assignor until, but not after, the account
debtor receives a notification, authenticated signed by the assignor or the
assignee, that the amount due or to become due has been assigned and that
payment is to be made to the assignee. After receipt of the notification, the
account debtor may discharge its obligation by paying the assignee and may
not discharge the obligation by paying the assignor.
   (b) Subject to subsection (g) subsections (h) and (l) of this section,
notification is ineffective under subsection (a) of this section:
                                        ***
   (c) Subject to subsection (g) subsections (h) and (l) of this section, if
requested by the account debtor, an assignee shall seasonably furnish
reasonable proof that the assignment has been made. Unless the assignee
complies, the account debtor may discharge its obligation by paying the
assignor, even if the account debtor has received a notification under
subsection (a) of this section.
   (d) In this subsection, “promissory note” includes a negotiable instrument
that evidences chattel paper. Except as otherwise provided in subsection
subsections (e) and (k) of this section and sections 2A—303 and 9—407 of
this title, and subject to subsection (g)(h) of this section, a term in an
agreement between an account debtor and an assignor or in a promissory note
is ineffective to the extent that it:
                                        ***
                                                                     VT LEG #383691 v.1
No. 17  Page 78 of 118
2025
   (e) Subsection (d) of this section does not apply to the sale of a payment
intangible or promissory note, other than a sale pursuant to a disposition under
section 9—610 of this title or an acceptance of collateral under section 9—620
of this title.
   (f) Subject to subsection (g) of this section, an account debtor may not
waive or vary its option under subdivision (b)(3) of this section. Except as
otherwise provided in subsection (k) of this section and sections 2A—303 and
9—407 of this title and subject to subsections (h) and (i) of this section, a rule
of law, statute, or regulation that prohibits, restricts, or requires the consent of
a government, governmental body or official, or account debtor to the
assignment or transfer of, or creation of a security interest in, an account or
chattel paper is ineffective to the extent that the rule of law, statute, or
regulation:
       (1) prohibits, restricts, or requires the consent of the government,
governmental body or official, or account debtor to the assignment or transfer
of, or the creation, attachment, perfection, or enforcement of, a security interest
in the account or chattel paper; or
       (2) provides that the assignment or transfer or the creation, attachment,
perfection, or enforcement of the security interest may give rise to a default,
breach, right of recoupment, claim, defense, termination, right of termination,
or remedy under the account or chattel paper.
                                                                      VT LEG #383691 v.1
No. 17  Page 79 of 118
2025
   (g) This section is subject to law other than this article which establishes a
different rule for an account debtor who is an individual and who incurred the
obligation primarily for personal, family, or household purposes. Subject to
subsections (h) and (l) of this section, an account debtor may not waive or vary
its option under subdivision (b)(3) of this section.
   (h) This section does not apply to an assignment of a health care insurance
receivable This section is subject to law other than this article which
establishes a different rule for an account debtor who is an individual and who
incurred the obligation primarily for personal, family, or household purposes.
   (i) This section does not apply to an assignment of a health care insurance
receivable.
   (j) This section prevails over any inconsistent provisions of this title.
   (k) Subsections (d), (f), and (j) of this section do not apply to a security
interest in an ownership interest in a general partnership, limited partnership,
or limited liability company.
   (l) Subsections (a), (b), (c), and (g) of this section do not apply to a
controllable account or controllable payment intangible.
                                       ***
§ 9—408. RESTRICTIONS ON ASSIGNMENT OF PROMISSORY
              NOTES, HEALTH CARE INSURANCE RECEIVABLES, AND
              CERTAIN GENERAL INTANGIBLES INEFFECTIVE
                                                                    VT LEG #383691 v.1
No. 17  Page 80 of 118
2025
   (a) Except as otherwise provided in subsection subsections (b) and (f) of
this section, a term in a promissory note or in an agreement between an
account debtor and a debtor which relates to a health care insurance receivable
or a general intangible, including a contract, permit, license, or franchise, and
which term prohibits, restricts, or requires the consent of the person obligated
on the promissory note or the account debtor to, the assignment or transfer of,
or creation, attachment, or perfection of a security interest in, the promissory
note, health care insurance receivable, or general intangible, is ineffective to
the extent that the term:
      (1) would impair the creation, attachment, or perfection of a security
interest; or
      (2) provides that the assignment or transfer or the creation, attachment,
or perfection of the security interest may give rise to a default, breach, right of
recoupment, claim, defense, termination, right of termination, or remedy under
the promissory note, health care insurance receivable, or general intangible.
   (b) Subsection (a) of this section applies to a security interest in a payment
intangible or promissory note only if the security interest arises out of a sale of
the payment intangible or promissory note, other than a sale pursuant to a
disposition under section 9—610 of this title or an acceptance of collateral
under section 9—620 of this title.
   (c) A Except as otherwise provided in subsection (f) of this section, a rule
of law, statute, or regulation, which prohibits, restricts, or requires the consent
                                                                    VT LEG #383691 v.1
No. 17  Page 81 of 118
2025
of a government, governmental body or official, person obligated on a
promissory note, or account debtor to the assignment or transfer of, or creation
of a security interest in, a promissory note, health care insurance receivable, or
general intangible, including a contract, permit, license, or franchise between
an account debtor and a debtor, is ineffective to the extent that the rule of law,
statute, or regulation:
      (1) would impair the creation, attachment, or perfection of a security
interest; or
      (2) provides that the assignment or transfer or the creation, attachment,
or perfection of the security interest may give rise to a default, breach, right of
recoupment, claim, defense, termination, right of termination, or remedy under
the promissory note, health care insurance receivable, or general intangible.
   (d) To the extent that a term in a promissory note or in an agreement
between an account debtor and a debtor which relates to a health care
insurance receivable or general intangible or a rule of law, statute, or
regulation described in subsection (c) of this section would be effective under
law other than this article but is ineffective under subsection (a) or (c) of this
section, the creation, attachment, or perfection of a security interest in the
promissory note, health care insurance receivable, or general intangible:
      (1) is not enforceable against the person obligated on the promissory
note or the account debtor;
                                                                     VT LEG #383691 v.1
No. 17  Page 82 of 118
2025
      (2) does not impose a duty or obligation on the person obligated on the
promissory note or the account debtor;
      (3) does not require the person obligated on the promissory note or the
account debtor to recognize the security interest, pay or render performance to
the secured party, or accept payment or performance from the secured party;
      (4) does not entitle the secured party to use or assign the debtor’s rights
under the promissory note, health care insurance receivable, or general
intangible, including any related information or materials furnished to the
debtor in the transaction giving rise to the promissory note, health care
insurance receivable, or general intangible;
      (5) does not entitle the secured party to use, assign, possess, or have
access to any trade secrets or confidential information of the person obligated
on the promissory note or the account debtor; and
      (6) does not entitle the secured party to enforce the security interest in
the promissory note, health care insurance receivable, or general intangible.
   (e) This section prevails over any inconsistent provisions of this title.
   (f) This section does not apply to a security interest in an ownership
interest in a general partnership, limited partnership, or limited liability
company.
   (g) In this section, “promissory note” includes a negotiable instrument that
evidences chattel paper.
                                       ***
                                                                     VT LEG #383691 v.1
No. 17  Page 83 of 118
2025
§ 9—509. PERSONS ENTITLED TO FILE A RECORD
   (a) A person may file an initial financing statement, amendment that adds
collateral covered by a financing statement, or amendment that adds a debtor to
a financing statement only if:
      (1) the debtor authorizes the filing in an authenticated a signed record or
pursuant to subsection (b) or (c) of this section; or
      (2) the person holds an agricultural lien that has become effective at the
time of filing and the financing statement covers only collateral in which the
person holds an agricultural lien.
   (b) By authenticating signing or becoming bound as debtor by a security
agreement, a debtor or new debtor authorizes the filing of an initial financing
statement, and an amendment, covering:
                                       ***
§ 9—513. TERMINATION STATEMENT
                                       ***
   (b) To comply with subsection (a) of this section, a secured party shall
cause the secured party of record to file the termination statement:
      (1) within one month after there is no obligation secured by the
collateral covered by the financing statement and no commitment to make an
advance, incur an obligation, or otherwise give value; or
      (2) if earlier, within 20 days after the secured party receives an
authenticated a signed demand from a debtor.
                                                                   VT LEG #383691 v.1
No. 17  Page 84 of 118
2025
   (c) In cases not governed by subsection (a) of this section, within 20 days
after a secured party receives an authenticated a signed demand from a debtor,
the secured party shall cause the secured party of record for a financing
statement to send to the debtor a termination statement for the financing
statement or file the termination statement in the filing office if:
                                        ***
§ 9—601. RIGHTS AFTER DEFAULT; JUDICIAL ENFORCEMENT;
            CONSIGNOR OR BUYER ACCOUNTS; CHATTEL PAPER,
            PAYMENT INTANGIBLES, OR PROMISSORY NOTES
                                        ***
   (b) A secured party in possession of collateral or control of collateral under
section 7—106, 9—104, 9—105, 9—105A, 9—106, or 9—107, or 9—107A of
this title has the rights and duties provided in section 9—207 of this title.
                                        ***
§ 9—605. UNKNOWN DEBTOR OR SECONDARY OBLIGOR
   (a) A Except as provided in subsection (b) of this section, a secured party
does not owe a duty based on its status as secured party:
                                        ***
   (b) A secured party owes a duty based on its status as a secured party to a
person if, at the time the secured party obtains control of collateral that is a
controllable account, controllable electronic record, or controllable payment
intangible or at the time the security interest attaches to the collateral,
                                                                       VT LEG #383691 v.1
No. 17  Page 85 of 118
2025
whichever is later:
      (1) the person is a debtor or obligor; and
      (2) the secured party knows that the information in subdivision
(a)(1)(A), (B), or (C) of this section relating to the person is not provided by
the collateral, a record attached to or logically associated with the collateral, or
the system in which the collateral is recorded.
                                        ***
§ 9—608. APPLICATION OF PROCEEDS OF COLLECTION OR
            ENFORCEMENT; LIABILITY FOR DEFICIENCY AND RIGHT
            TO SURPLUS
   (a) If a security interest or agricultural lien secures payment or performance
of an obligation, the following rules apply:
      (1) A secured party shall apply or pay over for application the cash
proceeds of collection or enforcement under section 9—607 of this title in the
following order to:
                                        ***
         (C) the satisfaction of obligations secured by any subordinate
security interest in or other lien on the collateral subject to the security interest
or agricultural lien under which the collection or enforcement is made if the
secured party receives an authenticated a signed demand for proceeds before
distribution of the proceeds is completed.
                                        ***
                                                                      VT LEG #383691 v.1
No. 17  Page 86 of 118
2025
§ 9—611. NOTIFICATION BEFORE DISPOSITION OF COLLATERAL
   (a) In this section, “notification date” means the earlier of the date on
which:
      (1) a secured party sends to the debtor and any secondary obligor an
authenticated a signed notification of disposition; or
      (2) the debtor and any secondary obligor waive the right to notification.
   (b) Except as otherwise provided in subsection (d) of this section, a secured
party that disposes of collateral under section 9—610 of this title shall send to
the persons specified in subsection (c) of this section a reasonable
authenticated signed notification of disposition.
   (c) To comply with subsection (b) of this section, the secured party shall
send an authenticated a signed notification of disposition to:
                                       ***
      (3) if the collateral is other than consumer goods:
         (A) any other person from which the secured party has received,
before the notification date, an authenticated a signed notification of a claim of
an interest in the collateral;
                                       ***
   (e) A secured party complies with the requirement for notification
prescribed in subdivision (c)(3)(B) of this section if:
                                       ***
      (2) before the notification date, the secured party:
                                                                   VT LEG #383691 v.1
No. 17  Page 87 of 118
2025
         (A) did not receive a response to the request for information; or
         (B) received a response to the request for information and sent an
authenticated a signed notification of disposition to each secured party named
in that response whose financing statement covered the collateral.
                                      ***
§ 9—613. CONTENTS AND FORM OF NOTIFICATION BEFORE
              DISPOSITION OF COLLATERAL: GENERAL
    (a) Except in a consumer-goods transaction, the following rules apply:
                                      ***
      (5) The following form of notification and the form appearing in
subdivision 9—614(3) 9—614(a)(3) of this title, when completed in
accordance with the instructions in subsection (b) of this section and
subsection 9—614(b) of this title, each provides sufficient information:
           NOTIFICATION OF DISPOSITION OF COLLATERAL
To: [Name of debtor, obligor, or other person to which the notification is sent
]
From: [Name, address, and telephone number of secured party ]
Name of Debtor(s): [Include only if debtor(s) are not an addressee ]
For a public disposition:
We will sell the [describe collateral ] to the highest qualified bidder in public
as follows:
Day and Date: _______________
                                                                   VT LEG #383691 v.1
No. 17  Page 88 of 118
2025
Time: __________________
Place: __________________
For a private disposition:
We will sell the [describe collateral ] privately sometime after [day and date ].
You are entitled to an accounting of the unpaid indebtedness secured by the
property that we intend to sell. You may request an accounting by calling us at
[telephone number ].
            NOTIFICATION OF DISPOSITION OF COLLATERAL
To: (Name of debtor, obligor, or other person to which the notification is sent)
From: (Name, address, and telephone number of secured party)
   {1} Name of any debtor that is not an addressee: (Name of each debtor)
   {2} We will sell (describe collateral) (to the highest qualified bidder) at
public sale. A sale could include a lease or license. The sale will be held as
follows:
           (Date)
           (Time)
           (Place)
   {3} We will sell (describe collateral) at private sale sometime after (date).
A sale could include a lease or license.
   {4} You are entitled to an accounting of the unpaid indebtedness secured
by the property that we intend to sell or, as applicable, lease or license.
   {5} If you request an accounting you must pay a charge of $ (amount).
                                                                    VT LEG #383691 v.1
No. 17  Page 89 of 118
2025
   {6} You may request an accounting by calling us at (telephone number).
   (b) The following instructions apply to the form of notification in
subdivision (a)(5) of this section:
      (1) The instructions in this subsection refer to the numbers in braces
before items in the form of notification in subdivision (a)(5) of this section.
Do not include the numbers or braces in the notification. The numbers and
braces are used only for the purpose of these instructions.
      (2) Include and complete item {1} only if there is a debtor that is not an
addressee of the notification and list the name or names.
      (3) Include and complete either item {2}, if the notification relates to a
public disposition of the collateral, or item {3}, if the notification relates to a
private disposition of the collateral. If item {2} is included, include the words
“to the highest qualified bidder” only if applicable.
      (4) Include and complete items {4} and {6}.
      (5) Include and complete item {5} only if the sender will charge the
recipient for an accounting.
§ 9—614. CONTENTS AND FORM OF NOTIFICATION BEFORE
            DISPOSITION OF COLLATERAL; CONSUMER GOODS
            TRANSACTION
   (a) In a consumer goods transaction, the following rules apply:
      (1) A notification of disposition must provide the following information:
                                                                      VT LEG #383691 v.1
No. 17  Page 90 of 118
2025
              (A) the information specified in subdivision 9—613(1) 9—613(a)(1)
of this title;
                                                        ***
         (3) The following form of notification, when completed in accordance
with the instructions in subsection (b) of this section, provides sufficient
information:
......................................... [Name and address of secured party ]
.........................................
......................................... [Date ] .........................................
NOTICE OF OUR PLAN TO SELL PROPERTY
......................................... [Name and address of any obligor who is also a
debtor ] .........................................
Subject: ......................................... [Identification of Transaction ]
.........................................
We have your ........... [describe collateral ] ........... , because you broke
promises in our agreement.
For a public disposition:
We will sell ........... [describe collateral ] ........... at public sale. A sale could
include a lease or license. The sale will be held as follows:
Date: .........................................
Time: .........................................
Place: .........................................
                                                                                              VT LEG #383691 v.1
No. 17  Page 91 of 118
2025
You may attend the sale and bring bidders if you want.
or
For a private disposition:
We will sell ........... [describe collateral ] ........... at private sale sometime after
...... [date ] ...... . A sale could include a lease or license.
The money that we get from the sale (after paying our costs) will reduce the
amount you owe. If we get less money than you owe, you ...... [will or will not,
as applicable ] ...... still owe us the difference. If we get more money than you
owe, you will get the extra money, unless we must pay it to someone else.
You can get the property back at any time before we sell it by paying us the
full amount you owe (not just the past due payments), including our expenses.
To learn the exact amount you must pay, call us at ............. [telephone number
] ......................................... .
If you want us to explain to you in writing how we have figured the amount
that you owe us, you may call us at ............. [telephone number ] ............. or
write us at .................. [secured party’s address ] .................... and request a
written explanation. We will charge you $..... for the explanation if we sent you
another written explanation of the amount you owe us within the last six
months.
If you need more information about the sale call us at ............. [telephone
number ] ............. or write us at .................... [secured party’s address ]
.................... .
                                                                               VT LEG #383691 v.1
No. 17  Page 92 of 118
2025
We are sending this notice to the following other people who have an interest
in ...... [describe collateral ] ...... or who owe money under your agreement:
............... [it Names of all other debtors and obligors, if any ] ...............
(Name and address of secured party)
(Date)
                 NOTICE OF OUR PLAN TO SELL PROPERTY
(Name and address of any obligor who is also a debtor)
Subject: (Identify transaction)
   We have your (describe collateral), because you broke promises in our
agreement.
   {1} We will sell (describe collateral) at public sale. A sale could include a
lease or license. The sale will be held as follows:
   (Date)
   (Time)
   (Place)
   You may attend the sale and bring bidders if you want.
   {2} We will sell (describe collateral) at private sale sometime after (date).
A sale could include a lease or license.
   {3} The money that we get from the sale, after paying our costs, will
reduce the amount you owe. If we get less money than you owe, you (will or
will not, as applicable) still owe us the difference. If we get more money than
you owe, you will get the extra money, unless we must pay it to someone else.
                                                                             VT LEG #383691 v.1
No. 17  Page 93 of 118
2025
   {4} You can get the property back at any time before we sell it by paying
us the full amount you owe, not just the past due payments, including our
expenses. To learn the exact amount you must pay, call us at (telephone
number).
   {5} If you want us to explain to you in (writing) (writing or in (description
of electronic record)) (description of electronic record) how we have figured
the amount that you owe us, {6} call us at (telephone number) (or) (write us at
(secured party’s address)) (or contact us by (description of electronic
communication method)) {7} and request (a written explanation) (a written
explanation or an explanation in (description of electronic record)) (an
explanation in (description of electronic record)).
   {8} We will charge you $ (amount) for the explanation if we sent you
another written explanation of the amount you owe us within the last six
months.
   {9} If you need more information about the sale (call us at (telephone
number)) (or) (write us at (secured party’s address)) (or contact us by
(description of electronic communication method)).
   {10} We are sending this notice to the following other people who have an
interest in (describe collateral) or who owe money under your agreement:
(Names of all other debtors and obligors, if any)
                                      ***
   (b) The following instructions apply to the form of notification in
                                                                  VT LEG #383691 v.1
No. 17  Page 94 of 118
2025
subdivision (a)(3) of this section:
      (1) The instructions in this subsection refer to the numbers in braces
before items in the form of notification in subdivision (a)(3) of this section.
Do not include the numbers or braces in the notification. The numbers and
braces are used only for the purpose of these instructions.
      (2) Include and complete either item {1}, if the notification relates to a
public disposition of the collateral, or item {2}, if the notification relates to a
private disposition of the collateral.
      (3) Include and complete items {3}, {4}, {5}, {6}, and {7}.
      (4) In item {5}, include and complete any one of the three alternative
methods for the explanation—writing, writing or electronic record, or
electronic record.
      (5) In item {6}, include the telephone number. In addition, the sender
may include and complete either or both of the two additional alternative
methods of communication—writing or electronic communication—for the
recipient of the notification to communicate with the sender. Neither of the
two additional methods of communication is required to be included.
      (6) In item {7}, include and complete the method or methods for the
explanation—writing, writing or electronic record, or electronic record—
included in item {5}.
      (7) Include and complete item {8} only if a written explanation is
included in item {5} as a method for communicating the explanation and the
                                                                      VT LEG #383691 v.1
No. 17  Page 95 of 118
2025
sender will charge the recipient for another written explanation.
         (8) In item {9}, include either the telephone number or the address or
both the telephone number and the address. In addition, the sender may
include and complete the additional method of communication—electronic
communication—for the recipient of the notification to communicate with the
sender. The additional method of electronic communication is not required to
be included.
         (9) If item {10} does not apply, insert “None” after “agreement:”.
§ 9—615. APPLICATION OF PROCEEDS OF DISPOSITION; LIABILITY
              FOR DEFICIENCY AND RIGHT TO SURPLUS
      (a) A secured party shall apply or pay over for application the cash
proceeds of disposition under section 9—610 of this title in the following order
to:
                                         ***
         (3) the satisfaction of obligations secured by any subordinate security
interest in or other subordinate lien on the collateral if:
            (A) the secured party receives from the holder of the subordinate
security interest or other lien an authenticated a signed demand for proceeds
before distribution of the proceeds is completed; and
            (B) in a case in which a consignor has an interest in the collateral, the
subordinate security interest or other lien is senior to the interest of the
consignor; and
                                                                      VT LEG #383691 v.1
No. 17  Page 96 of 118
2025
      (4) a secured party that is a consignor of the collateral if the secured
party receives from the consignor an authenticated a signed demand for
proceeds before distribution of the proceeds is completed.
                                       ***
§ 9—616. EXPLANATION OF CALCULATION OF SURPLUS OR
            DEFICIENCY
   (a) In this section:
      (1) “Explanation” means a writing record that:
                                       ***
      (2) “Request” means a record:
         (A) authenticated signed by a debtor or consumer obligor;
                                       ***
   (b) In a consumer goods transaction in which the debtor is entitled to a
surplus or a consumer obligor is liable for a deficiency under section 9—615 of
this title, the secured party shall:
      (1) send an explanation to the debtor or consumer obligor, as applicable,
after the disposition and:
         (A) before or when the secured party accounts to the debtor and pays
any surplus or first makes written demand in a record on the consumer obligor
after the disposition for payment of the deficiency; and
                                       ***
                                                                   VT LEG #383691 v.1
No. 17  Page 97 of 118
2025
   (c) To comply with subdivision (a)(1)(B) of this section, a writing an
explanation must provide the following information in the following order:
                                       ***
§ 9—619. TRANSFER OF RECORD OR LEGAL TITLE
   (a) In this section, “transfer statement” means a record authenticated signed
by a secured party stating:
                                       ***
§ 9—620. ACCEPTANCE OF COLLATERAL IN FULL OR PARTIAL
            SATISFACTION OF OBLIGATION; COMPULSORY
            DISPOSITION OF COLLATERAL
   (a) Except as otherwise provided in subsection (g) of this section, a secured
party may accept collateral in full or partial satisfaction of the obligation it
secures only if:
      (1) the debtor consents to the acceptance under subsection (c) of this
section;
      (2) the secured party does not receive, within the time set forth in
subsection (d) of this section, a notification of objection to the proposal
authenticated signed by:
                                       ***
   (b) A purported or apparent acceptance of collateral under this section is
ineffective unless:
                                                                     VT LEG #383691 v.1
No. 17  Page 98 of 118
2025
      (1) the secured party consents to the acceptance in an authenticated a
signed record or sends a proposal to the debtor; and
      (2) the conditions of subsection (a) of this section are met.
   (c) For purposes of this section:
      (1) a debtor consents to an acceptance of collateral in partial satisfaction
of the obligation it secures only if the debtor agrees to the terms of the
acceptance in a record authenticated signed after default; and
      (2) a debtor consents to an acceptance of collateral in full satisfaction of
the obligation it secures only if the debtor agrees to the terms of the acceptance
in a record authenticated signed after default or the secured party:
                                       ***
         (C) does not receive a notification of objection authenticated signed
by the debtor within 20 days after the proposal is sent.
                                       ***
   (f) To comply with subsection (e) of this section, the secured party shall
dispose of the collateral:
      (1) within 90 days after taking possession; or
      (2) within any longer period to which the debtor and all secondary
obligors have agreed in an agreement to that effect entered into and
authenticated signed after default.
                                       ***
                                                                      VT LEG #383691 v.1
No. 17  Page 99 of 118
2025
§ 9—621. NOTIFICATION OF PROPOSAL TO ACCEPT COLLATERAL
   (a) A secured party that desires to accept collateral in full or partial
satisfaction of the obligation it secures shall send its proposal to:
      (1) any person from which the secured party has received, before the
debtor consented to the acceptance, an authenticated a signed notification of a
claim of an interest in the collateral;
                                          ***
§ 9—624. WAIVER
   (a) A debtor or secondary obligor may waive the right to notification of
disposition of collateral under section 9—611 of this title only by an agreement
to that effect entered into and authenticated signed after default.
   (b) A debtor may waive the right to require disposition of collateral under
subsection 9—620(e) of this title only by an agreement to that effect entered
into and authenticated signed after default.
   (c) Except in a consumer goods transaction, a debtor or secondary obligor
may waive the right to redeem collateral under section 9—623 of this title only
by an agreement to that effect entered into and authenticated signed after
default.
                                          ***
§ 9—628. NONLIABILITY AND LIMITATION ON LIABILITY OF
            SECURED PARTY; LIABILITY OF SECONDARY OBLIGOR
                                                                        VT LEG #383691 v.1
No. 17  Page 100 of 118
2025
   (a) Unless Subject to subsection (f) of this section, unless a secured party
knows that a person is a debtor or obligor, knows the identity of the person,
and knows how to communicate with the person:
                                       ***
   (b) A Subject to subsection (f) of this section, a secured party is not liable
because of its status as secured party:
                                       ***
   (f) Subsections (a) and (b) of this section do not apply to limit the liability
of a secured party to a person if, at the time the secured party obtains control of
collateral that is a controllable account, controllable electronic record, or
controllable payment intangible or at the time the security interest attaches to
the collateral, whichever is later:
      (1) the person is a debtor or obligor; and
      (2) the secured party knows that the information in subdivision
(b)(1)(A), (B), or (C) of this section relating to the person is not provided by
the collateral, a record attached to or logically associated with the collateral, or
the system in which the collateral is recorded.
                                       ***
                                                                     VT LEG #383691 v.1
No. 17  Page 101 of 118
2025
Sec. 10. 9A V.S.A. article 12 is added to read:
          ARTICLE 12. CONTROLLABLE ELECTRONIC RECORDS
§ 12—101. TITLE
   This article may be cited as Uniform Commercial Code—Controllable
Electronic Records.
§ 12—102. DEFINITIONS
   (a) In this article:
      (1) “Controllable electronic record” means a record stored in an
electronic medium that can be subjected to control under section 12—105 of
this title. The term does not include a controllable account, a controllable
payment intangible, a deposit account, an electronic copy of a record
evidencing chattel paper, an electronic document of title, electronic money,
investment property, or a transferable record.
      (2) “Qualifying purchaser” means a purchaser of a controllable
electronic record or an interest in a controllable electronic record that obtains
control of the controllable electronic record for value, in good faith, and
without notice of a claim of a property right in the controllable electronic
record.
      (3) “Transferable record” has the meaning provided for that term:
          (A) in section 201(a)(1) of the Electronic Signatures in Global and
National Commerce Act, 15 U.S.C. Section 7021(a)(1), as may be amended; or
          (B) as defined in 9 V.S.A. § 285.
                                                                    VT LEG #383691 v.1
No. 17  Page 102 of 118
2025
       (4) “Value” has the meaning provided in subsection 3—303(a) of this
title, as if references in that subsection to an “instrument” were references to a
controllable account, controllable electronic record, or controllable payment
intangible.
   (b) The definitions in Article 9 of this title of “account debtor,”
“controllable account,” “controllable payment intangible,” “chattel paper,”
“deposit account,” “electronic money,” and “investment property” apply to this
article.
§ 12—103. RELATION TO ARTICLE 9 AND CONSUMER LAWS
   (a) If there is conflict between this article and Article 9, Article 9 governs.
   (b) A transaction subject to this article is subject to any applicable rule of
law that establishes a different rule for consumers, to any other statute or rule
of this State that regulates the rates, charges, agreements, and practices for
loans, credit sales, or other extensions of credit, and to any consumer
protection statute or rule of this State.
   (c) Article 1 of this title contains general definitions and principles of
construction and interpretation applicable throughout this article.
§ 12—104. RIGHTS IN CONTROLLABLE ACCOUNT, CONTROLLABLE
              ELECTRONIC RECORD, AND CONTROLLABLE PAYMENT
              INTANGIBLE
   (a) This section applies to the acquisition and purchase of rights in a
controllable account or controllable payment intangible, including the rights
                                                                    VT LEG #383691 v.1
No. 17  Page 103 of 118
2025
and benefits under subsections (c), (d), (e), (g), and (h) of this section of a
purchaser and qualifying purchaser, in the same manner this section applies to
a controllable electronic record.
   (b) 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) 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) 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) 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) Except as provided in subsections (a) and (e) of this section 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
                                                                     VT LEG #383691 v.1
No. 17  Page 104 of 118
2025
electronic record subject to a claim of a property right in the right to payment,
right to performance, or other interest in property.
   (g) 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 of a financing statement under Article 9 is not notice of a claim
of a property right in a controllable electronic record.
§ 12—105. CONTROL OF CONTROLLABLE ELECTRONIC RECORD
   (a) A person has control of a controllable electronic record if the electronic
record, a record attached to or logically associated with the electronic record,
or a system in which the electronic record is recorded:
      (1) gives the person:
         (A) power to avail itself of substantially all the benefit from the
electronic record; and
         (B) exclusive power, subject to subsection (b) of this section, to:
            (i) prevent others from availing themselves of substantially all the
benefit from the electronic record; and
            (ii) transfer control of the electronic record to another person or
cause another person to obtain control of another controllable electronic record
as a result of the transfer of the electronic record; and
                                                                   VT LEG #383691 v.1
No. 17  Page 105 of 118
2025
      (2) enables the person readily to identify itself in any way, including by
name, identifying number, cryptographic key, office, or account number, as
having the powers specified in subdivision (1) of this subsection.
   (b) Subject to subsection (c) of this section, a power is exclusive under
subdivisions (a)(1)(B)(i) and (ii) of this section even if:
      (1) the controllable electronic record, a record attached to or logically
associated with the electronic record, or a system in which the electronic
record is recorded limits the use of the electronic record or has a protocol
programmed to cause a change, including a transfer or loss of control or a
modification of benefits afforded by the electronic record; or
      (2) the power is shared with another person.
   (c) A power of a person is not shared with another person under
subdivision (b)(2) of this section 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 controllable
electronic record or a controllable account or controllable payment intangible
evidenced by the controllable electronic record.
   (d) If a person has the powers specified in subdivisions (a)(1)(B)(i) and (ii)
                                                                    VT LEG #383691 v.1
No. 17  Page 106 of 118
2025
of this section, the powers are presumed to be exclusive.
   (e) A person has control of a controllable electronic record if another
person, other than the transferor to the person of an interest in the controllable
electronic record or a controllable account or controllable payment intangible
evidenced by the controllable electronic record:
      (1) has control of the electronic record and acknowledges that it has
control on behalf of the person; or
      (2) obtains control of the electronic record after having acknowledged
that it will obtain control of the electronic record on behalf of the person.
   (f) A person that has control under this section is not required to
acknowledge that it has control on behalf of another person.
   (g) 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.
§ 12—106. DISCHARGE OF ACCOUNT DEBTOR ON CONTROLLABLE
             ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE
   (a) An account debtor on a controllable account or controllable payment
intangible may discharge its obligation by paying:
      (1) the person having control of the controllable electronic record that
evidences the controllable account or controllable payment intangible; or
                                                                    VT LEG #383691 v.1
No. 17  Page 107 of 118
2025
      (2) except as provided in subsection (b) of this section, a person that
formerly had control of the controllable electronic record.
   (b) Subject to subsection (d) of this section, the account debtor may not
discharge its obligation by paying a person that formerly had control of the
controllable electronic record if the account debtor receives a notification that:
      (1) is signed by a person that formerly had control or the person to
which control was transferred;
      (2) reasonably identifies the controllable account or controllable
payment intangible;
      (3) notifies the account debtor that control of the controllable electronic
record that evidences the controllable account or controllable payment
intangible was transferred;
      (4) identifies the transferee, in any reasonable way, including by name,
identifying number, cryptographic key, office, or account number; and
      (5) provides a commercially reasonable method by which the account
debtor is to pay the transferee.
   (c) After receipt of a notification that complies with subsection (b) of this
section, the account debtor may discharge its obligation by paying in
accordance with the notification and may not discharge the obligation by
paying a person that formerly had control.
   (d) Subject to subsection (h) of this section, notification is ineffective under
subsection (b) of this section:
                                                                   VT LEG #383691 v.1
No. 17  Page 108 of 118
2025
      (1) unless, before the notification is sent, the account debtor and the
person that, at that time, had control of the controllable electronic record that
evidences the controllable account or controllable payment intangible agree in
a signed record to a commercially reasonable method by which a person may
furnish reasonable proof that control has been transferred;
      (2) to the extent an agreement between the account debtor and seller of a
payment intangible limits the account debtor’s duty to pay a person other than
the seller and the limitation is effective under law other than this article; or
      (3) at the option of the account debtor, if the notification notifies the
account debtor to:
         (A) divide a payment;
         (B) make less than the full amount of an installment or other periodic
payment; or
         (C) pay any part of a payment by more than one method or to more
than one person.
   (e) Subject to subsection (h) of this section, if requested by the account
debtor, the person giving the notification under subsection (b) of this section
seasonably shall furnish reasonable proof, using the method in the agreement
referred to in subdivision (d)(1) of this section, that control of the controllable
electronic record has been transferred. Unless the person complies with the
request, the account debtor may discharge its obligation by paying a person
                                                                     VT LEG #383691 v.1
No. 17  Page 109 of 118
2025
that formerly had control, even if the account debtor has received a notification
under subsection (b) of this section.
   (f) A person furnishes reasonable proof under subsection (e) of this section
that control has been transferred if the person demonstrates, using the method
in the agreement referred to in subdivision (d)(1) of this section, that the
transferee has the power to:
      (1) avail itself of substantially all the benefit from the controllable
electronic record;
      (2) prevent others from availing themselves of substantially all the
benefit from the controllable electronic record; and
      (3) transfer the powers specified in subdivisions (1) and (2) of this
subsection to another person.
   (g) Subject to subsection (h) of this section, an account debtor may not
waive or vary its rights under subdivision (d)(1) or subsection (e) of this
section or its option under subdivision (d)(3) of this section.
   (h) This section is subject to law other than this article which establishes a
different rule for an account debtor who is an individual and who incurred the
obligation primarily for personal, family, or household purposes.
                                                                    VT LEG #383691 v.1
No. 17  Page 110 of 118
2025
§ 12—107. GOVERNING LAW
   (a) Except as provided in subsection (b) of this section, the local law of a
controllable electronic record’s jurisdiction governs a matter covered by this
article.
   (b) 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 of
this title unless an effective agreement determines that the local law of another
jurisdiction governs.
   (c) 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 or title,
that jurisdiction is the controllable electronic record’s jurisdiction.
       (2) If subdivision (1) of this subsection 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
                                                                     VT LEG #383691 v.1
No. 17  Page 111 of 118
2025
controllable electronic record’s jurisdiction for purposes of this article or title,
that jurisdiction is the controllable electronic record’s jurisdiction.
      (3) If subdivisions (1) and (2) of this subsection 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 subdivisions (1), (2), and (3) of this subsection 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 subdivisions (1)–(4) of this subsection do not apply, the
controllable electronic record’s jurisdiction is the District of Columbia.
   (d) If subdivision (5) of subsection (c) of this section 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
                                                                     VT LEG #383691 v.1
No. 17  Page 112 of 118
2025
without material modification. In this subsection, “Article 12” means Article
12 of Uniform Commercial Code Amendments (2022).
   (e) To the extent subsections (a) and (b) of this section 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) The rights acquired under section 12—104 of this title by a purchaser or
qualifying purchaser are governed by the law applicable under this section at
the time of purchase.
Sec. 11. TRANSITIONAL PROVISIONS FOR ARTICLES 9 AND 12 OF
          THE UNIFORM COMMERCIAL CODE AMENDMENTS
   (a) General provisions and definitions.
      (1) This section may be cited as Transitional Provisions for Uniform
Commercial Code Amendments (2022).
      (2) As used in this section:
         (A) “Adjustment date” means July 1, 2026, or the date that is one
year after the effective date of this act, whichever is later.
         (B) “Article 12” means Article 12 of the Uniform Commercial Code.
         (C) “Article 12 property” means a controllable account, controllable
electronic record, or controllable payment intangible.
                                                                   VT LEG #383691 v.1
No. 17  Page 113 of 118
2025
           (D) “Controllable account” has the same meaning as in section 9—
102 of the Uniform Commercial Code—Secured Transactions.
           (E) “Controllable electronic record” has the same meaning as in
section 12—102 of the Uniform Commercial Code—Controllable Electronic
Records.
           (F) “Controllable payment intangible” has the same meaning as in
section 9—102 of the Uniform Commercial Code—Secured Transactions.
           (G) “Electronic money” has the same meaning as in section 9-102 of
the Uniform Commercial Code—Secured Transactions.
           (H) “Financing statement” has the same meaning as in section 9—
102 of the Uniform Commercial Code—Secured Transactions.
      (3) Article 1 of the Uniform Commercial Code contains general
definitions and principles of construction and interpretation applicable
throughout this section.
   (b) Saving clause and exceptions.
      (1) Except as provided in subsections (c)–(g) of this section:
           (A) A transaction validly entered into before July 1, 2025 and the
rights, duties, and interests flowing from the transaction remain valid thereafter
and may be terminated, completed, consummated, or enforced as required or
permitted by law other than the Uniform Commercial Code, or, if applicable,
the Uniform Commercial Code, as though this act had not taken effect.
                                                                   VT LEG #383691 v.1
No. 17  Page 114 of 118
2025
         (B) Except as provided in subsections (c)—(g) of this section,
Article 9 as amended by this act and Article 12 apply to a transaction, lien, or
other interest in property, even if the transaction, lien, or interest was entered
into, created, or acquired before July 1, 2025.
      (2) Except as provided in subdivision (3) of this subsection and
subsections (c)–(g) of this section:
         (A) a transaction, lien, or interest in property that was validly entered
into, created, or transferred before July 1, 2025 and was not governed by the
Uniform Commercial Code, but would be subject to Article 9 as amended by
this act or Article 12 if it had been entered into, created, or transferred on or
after July 1, 2025, including the rights, duties, and interests flowing from the
transaction, lien, or interest, remains valid on and after July 1, 2025; and
         (B) the transaction, lien, or interest may be terminated, completed,
consummated, and enforced as required or permitted by this act or by the law
that would apply if this act had not taken effect.
      (3) This act does not affect an action, case, or proceeding commenced
before July 1, 2025.
   (c) Security interest perfected before effective date.
      (1) A security interest that is enforceable and perfected immediately
before July 1, 2025 is a perfected security interest under this act if, on July 1,
2025, the requirements for enforceability and perfection under this act are
satisfied without further action.
                                                                     VT LEG #383691 v.1
No. 17  Page 115 of 118
2025
        (2) If a security interest is enforceable and perfected immediately before
July 1, 2025, but the requirements for enforceability or perfection under this
act are not satisfied on July 1, 2025, the security interest:
           (A) is a perfected security interest until the earlier of the time
perfection would have ceased under the law in effect immediately before July
1, 2025 or the adjustment date;
           (B) remains enforceable thereafter only if the security interest
satisfies the requirements for enforceability under section 9—203 of the
Uniform Commercial Code, as amended by this act, before the adjustment
date; and
           (C) remains perfected thereafter only if the requirements for
perfection under this act are satisfied before the time specified in subdivision
(A) of this subdivision (c)(2).
   (d) Security interest unperfected before effective date. A security interest
that is enforceable immediately before July 1, 2025 but is unperfected at that
time:
        (1) remains an enforceable security interest until the adjustment date;
        (2) remains enforceable thereafter if the security interest becomes
enforceable under section 9—203 of the Uniform Commercial Code, as
amended by this act, on or before the adjustment date; and
        (3) becomes perfected:
                                                                      VT LEG #383691 v.1
No. 17  Page 116 of 118
2025
         (A) without further action, on July 1, 2025 if the requirements for
perfection under this act are satisfied before or at that time; or
         (B) when the requirements for perfection are satisfied if the
requirements are satisfied after that time.
   (e) Effectiveness of actions taken before effective date.
      (1) If action, other than the filing of a financing statement, is taken
before July 1, 2025 and the action would have resulted in perfection of the
security interest had the security interest become enforceable before July 1,
2025, the action is effective to perfect a security interest that attaches under
this act before the adjustment date. An attached security interest becomes
unperfected on the adjustment date unless the security interest becomes a
perfected security interest under this act before the adjustment date.
      (2) The filing of a financing statement before July 1, 2025 is effective to
perfect a security interest on July 1, 2025 to the extent the filing would satisfy
the requirements for perfection under this act.
      (3) The taking of an action before July 1, 2025 is sufficient for the
enforceability of a security interest on July 1, 2025 if the action would satisfy
the requirements for enforceability under this act.
   (f) Priority.
      (1) Subject to subdivisions (2) and (3) of this subsection, this act
determines the priority of conflicting claims to collateral.
                                                                      VT LEG #383691 v.1
No. 17  Page 117 of 118
2025
      (2) Subject to subdivision (3) of this subsection, if the priorities of
claims to collateral were established before July 1, 2025, Article 9 as in effect
before July 1, 2025 determines priority.
      (3) On the adjustment date, to the extent the priorities determined by
Article 9 as amended by this act modify the priorities established before July 1,
2025, the priorities of claims to Article 12 property and electronic money
established before July 1, 2025 cease to apply.
   (g) Priority of claims when priority rules of Article 9 do not apply.
      (1) Subject to subdivisions (2) and (3) of this subsection, Article 12
determines the priority of conflicting claims to Article 12 property when the
priority rules of Article 9 as amended by this act do not apply.
      (2) Subject to subdivision (3) of this subsection, when the priority rules
of Article 9 as amended by this act do not apply and the priorities of claims to
Article 12 property were established before July 1, 2025, law other than Article
12 determines priority.
      (3) When the priority rules of Article 9 as amended by this act do not
apply, to the extent the priorities determined by this act modify the priorities
established before July 1, 2025, the priorities of claims to Article 12 property
established before July 1, 2025 cease to apply on the adjustment date.
Sec. 11a. INCLUSION OF OFFICIAL COMMENTS
   Codification of the changes set forth in this act shall include the official
comments of the Uniform Commercial Code as set forth in the final official
                                                                    VT LEG #383691 v.1
No. 17  Page 118 of 118
2025
text of the American Law Institute and the National Conference of
Commissioners on Uniform State Laws, provided that the comments shall, in
addition, include appropriate references to any Vermont variations to the
official text.
Sec. 12. EFFECTIVE DATE
   This act shall take effect on July 1, 2025.
Date Governor signed bill: May 13, 2025
                                                                 VT LEG #383691 v.1