Title 42a — Title 42a: Uniform Commercial Code

Sec. 42a-3-304. Overdue instrument. (a) An instrument payable on demand becomes overdue at the earliest of the following times: (1) On the day after the day demand for payment is duly made; (2) If the instrument is a check, ninety days after its date; or (3) If the instrument is …

Sec. 42a-3-305. Defenses and claims in recoupment. (a) Except as stated in subsection (b), the right to enforce the obligation of a party to pay an instrument is subject to the following: (1) A defense of the obligor based on (i) infancy of the obligor to the extent it is a defen…

Sec. 42a-3-306. Claims to an instrument. A person taking an instrument, other than a person having rights of a holder in due course, is subject to a claim of a property or possessory right in the instrument or its proceeds, including a claim to rescind a negotiation and to recove…

Sec. 42a-3-307. Notice of breach of fiduciary duty. (a) In this section: (1) “Fiduciary” means an agent, trustee, partner, corporate officer or director, or other representative owing a fiduciary duty with respect to an instrument. (2) “Represented person” means the principal, be…

Sec. 42a-3-308. Proof of signatures and status as holder in due course. (a) In an action with respect to an instrument, the authenticity of, and authority to make, each signature on the instrument is admitted unless specifically denied in the pleadings. If the validity of a signa…

Sec. 42a-3-309. Enforcement of lost, destroyed or stolen instrument. (a) A person not in possession of an instrument is entitled to enforce the instrument if (i) the person was in possession of the instrument and entitled to enforce it when loss of possession occurred, (ii) the l…

Sec. 42a-3-310. Effect of instrument on obligation for which taken. (a) Unless otherwise agreed, if a certified check, cashier's check or teller's check is taken for an obligation, the obligation is discharged to the same extent discharge would result if an amount of money equal …

Sec. 42a-3-311. Accord and satisfaction by use of instrument. (a) If a person against whom a claim is asserted proves that (i) that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, (ii) the amount of the claim was unliquidated or subj…

Sec. 42a-3-312. Enforcement of lost, destroyed or stolen cashier's checks, teller's checks or certified checks. (a) In this section: (1) “Check” means a cashier's check, teller's check or certified check. (2) “Claimant” means a person who claims the right to receive the amount of…

Sec. 42a-3-401. Signature. (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 42a-3…

Sec. 42a-3-402. Signature by representative. (a) If a person acting, or purporting to act, as a representative signs an instrument by signing either the name of the represented person or the name of the signer, the represented person is bound by the signature to the same extent t…

Sec. 42a-3-403. Unauthorized signature. (a) Unless otherwise provided in this article or article 4, an unauthorized signature is ineffective except as the signature of the unauthorized signer in favor of a person who in good faith pays the instrument or takes it for value. An una…

Sec. 42a-3-404. Impostors. Fictitious payees. (a) If an impostor, by use of the mails or otherwise, induces the issuer of an instrument to issue the instrument to the impostor, or to a person acting in concert with the impostor, by impersonating the payee of the instrument or a p…

Sec. 42a-3-405. Employer's responsibility for fraudulent endorsement by employee. (a) In this section: (1) “Employee” includes an independent contractor and employee of an independent contractor retained by the employer. (2) “Fraudulent endorsement” means (i) in the case of an in…

Sec. 42a-3-406. Negligence contributing to forged signature or alteration of instrument. (a) A person whose failure to exercise ordinary care substantially contributes to an alteration of an instrument or to the making of a forged signature on an instrument is precluded from asse…

Sec. 42a-3-407. Alteration. (a) “Alteration” means (i) an unauthorized change in an instrument that purports to modify in any respect the obligation of a party, or (ii) an unauthorized addition of words or numbers or other change to an incomplete instrument relating to the obliga…

Sec. 42a-3-408. Drawee not liable on unaccepted draft. A check or other draft does not of itself operate as an assignment of funds in the hands of the drawee available for its payment, and the drawee is not liable on the instrument until the drawee accepts it. (1959, P.A. 133, S.…

Sec. 42a-3-409. Acceptance of draft. Certified check. (a) “Acceptance” means the drawee's signed agreement to pay a draft as presented. It must be written on the draft and may consist of the drawee's signature alone. Acceptance may be made at any time and becomes effective when n…

Sec. 42a-3-410. Acceptance varying draft. (a) If the terms of a drawee's acceptance vary from the terms of the draft as presented, the holder may refuse the acceptance and treat the draft as dishonored. In that case, the drawee may cancel the acceptance. (b) The terms of a draft …

Sec. 42a-3-411. Refusal to pay cashier's checks, teller's checks and certified checks. (a) In this section, “obligated bank” means the acceptor of a certified check or the issuer of a cashier's check or teller's check bought from the issuer. (b) If the obligated bank wrongfully (…

Sec. 42a-3-412. Obligation of issuer of note or cashier's check. The issuer of a note or cashier's check or other draft drawn on the drawer is obliged to pay the instrument (i) according to its terms at the time it was issued or, if not issued, at the time it first came into poss…

Sec. 42a-3-413. Obligation of acceptor. (a) The acceptor of a draft is obliged to pay the draft (i) according to its terms at the time it was accepted, even though the acceptance states that the draft is payable “as originally drawn” or equivalent terms, (ii) if the acceptance va…

Sec. 42a-3-414. Obligation of drawer. (a) This section does not apply to cashier's checks or other drafts drawn on the drawer. (b) If an unaccepted draft is dishonored, the drawer is obliged to pay the draft (i) according to its terms at the time it was issued or, if not issued, …

Sec. 42a-3-415. Obligation of endorser. (a) Subject to subsections (b) to (e), inclusive, of this section and to section 42a-3-419(d), if an instrument is dishonored, an endorser is obliged to pay the amount due on the instrument (i) according to the terms of the instrument at th…

Sec. 42a-3-416. Transfer warranties. (a) A person who transfers an instrument for consideration warrants to the transferee and, if the transfer is by endorsement, to any subsequent transferee that: (1) The warrantor is a person entitled to enforce the instrument; (2) all signatur…

Sec. 42a-3-417. Presentment warranties. (a) If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, (i) the person obtaining payment or acceptance, at the time of presentment, and (ii) a previous transferor of the draf…

Sec. 42a-3-418. Payment or acceptance by mistake. (a) Except as provided in subsection (c), if the drawee of a draft pays or accepts the draft and the drawee acted on the mistaken belief that (i) payment of the draft had not been stopped pursuant to section 42a-4-403 or (ii) the …

Sec. 42a-3-419. Instruments signed for accommodation. (a) If an instrument is issued for value given for the benefit of a party to the instrument (“accommodated party”) and another party to the instrument (“accommodation party”) signs the instrument for the purpose of incurring l…

Sec. 42a-3-420. Conversion of instrument. (a) The law applicable to conversion of personal property applies to instruments. An instrument is also converted if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes o…

Sec. 42a-3-501. Presentment. (a) “Presentment” means a demand made by or on behalf of a person entitled to enforce an instrument (i) to pay the instrument made to the drawee or a party obliged to pay the instrument or, in the case of a note or accepted draft payable at a bank, to…

Sec. 42a-3-502. Dishonor. (a) Dishonor of a note is governed by the following rules: (1) If the note is payable on demand, the note is dishonored if presentment is duly made to the maker and the note is not paid on the day of presentment. (2) If the note is not payable on demand …

Sec. 42a-3-503. Notice of dishonor. (a) The obligation of an endorser stated in section 42a-3-415(a) and the obligation of a drawer stated in section 42a-3-414(d) may not be enforced unless (i) the endorser or drawer is given notice of dishonor of the instrument complying with th…

Sec. 42a-3-504. Excused presentment and notice of dishonor. (a) Presentment for payment or acceptance of an instrument is excused if (i) the person entitled to present the instrument cannot with reasonable diligence make presentment, (ii) the maker or acceptor has repudiated an o…

Sec. 42a-3-505. Evidence of dishonor. (a) The following are admissible as evidence and create a presumption of dishonor and of any notice of dishonor stated: (1) A document regular in form as provided in subsection (b) which purports to be a protest; (2) a purported stamp or writ…

Secs. 42a-3-506 to 42a-3-511. Time allowed for acceptance or payment. Dishonor; holder's right of recourse; term allowing representment. Notice of dishonor. Protest; noting for protest. Evidence of dishonor and notice of dishonor. Waved or excused presentment, protest or notice o…

Sec. 42a-3-601. Discharge and effect of discharge. (a) The obligation of a party to pay the instrument is discharged as stated in this article or by an act or agreement with the party which would discharge an obligation to pay money under a simple contract. (b) Discharge of the o…

Sec. 42a-3-602. Payment. (a) Subject to subsection (b), an instrument is paid to the extent payment is made by or on behalf of a party obliged to pay the instrument (1) to a person entitled to enforce the instrument or (2) to the assignor in the case of a mortgage debt that is as…

Sec. 42a-3-603. Tender of payment. (a) If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument, the effect of tender is governed by principles of law applicable to tender of payment under a simple contract. (b) If tender o…

Sec. 42a-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 …

Sec. 42a-3-605. Discharge of endorsers and accommodation parties. (a) In this section, the term “endorser” includes a drawer having the obligation described in section 42a-3-414(d). (b) Discharge, under section 42a-3-604, of the obligation of a party to pay an instrument does not…

Sec. 42a-3-606. Impairment of recourse or of collateral. Section 42a-3-606 is repealed. (1959, P.A. 133, S. 3-606; P.A. 91-304, S. 112.) PART 7 ADVICE OF INTERNATIONAL SIGHT DRAFT

Sec. 42a-3-701. Letter of advice of international sight draft. Section 42a-3-701 is repealed. (1959, P.A. 133, S. 3-701; P.A. 91-304, S. 112.) PART 8 MISCELLANEOUS

Secs. 42a-3-801 to 42a-3-805. Drafts in a set. Effect of instrument on obligation for which it is given. Notice to third party. Lost, destroyed or stolen instruments. Instruments not payable to order or to bearer. Sections 42a-3-801 to 42a-3-805, inclusive, are repealed. (1959, P…

Sec. 42a-4-101. Short title: Uniform Commercial Code–Bank Deposits and Collections. This article may be cited as “Uniform Commercial Code–Bank Deposits and Collections”. (1959, P.A. 133, S. 4-101; P.A. 91-304, S. 68.) History: P.A. 91-304 made minor changes in wording.

Sec. 42a-4-102. Applicability. (a) To the extent that items within this article are also within articles 3 and 8, they are subject to those articles. If there is conflict, this article governs article 3, but article 8 governs this article. (b) The liability of a bank for action o…

Sec. 42a-4-103. Variation by agreement. Measure of damages. Action constituting ordinary care. (a) The effect of the provisions of this article may be varied by agreement, but the parties to the agreement cannot disclaim a bank's responsibility for its lack of good faith or failu…

Sec. 42a-4-104. Definitions and index of definitions. (a) In this article, unless the context otherwise requires: (1) “Account” means any deposit or credit account with a bank, including a demand, time, savings, passbook, share draft, or like account, other than an account eviden…

Sec. 42a-4-105. “Bank”. “Depositary bank”. “Payor bank”. “Intermediary bank”. “Collecting bank”. “Presenting bank”. In this article: (1) “Bank” means a person engaged in the business of banking, including a savings bank, savings and loan association, credit union, or trust compan…

Sec. 42a-4-106. Payable through or payable at bank. Collecting bank. (a) If an item states that it is “payable through” a bank identified in the item, (i) the item designates the bank as a collecting bank and does not by itself authorize the bank to pay the item, and (ii) the ite…

Sec. 42a-4-107. Separate office of bank. A branch or separate office of a bank is a separate bank for the purpose of computing the time within which and determining the place at or to which action may be taken or notice or orders must be given under this article and under article…