Title 13 — Uniform Commercial Code

This division shall be known and may be cited as Uniform Commercial Code -- Commercial Paper.

(1) In this division unless the context otherwise requires (a) Issue means the first delivery of an instrument to a holder or a remitter. (b) An order is a direction to pay and must be more than an authorization or request. It must identify the person to pay with reasonable certa…

(1) This division does not apply to money, documents of title or investment securities. (2) The provisions of this division are subject to the provisions of the division on bank deposits and collections (Division 4) and secured transactions (Division 9).

"Certificate of Deposit"; "Note". (1) Any writing to be a negotiable instrument within this division must: COL120106 (a) Be signed by the maker or drawer; and (b) Contain an unconditional promise or order to pay a sum certain in money and no other promise, order, obligation or po…

(1) A promise or order otherwise unconditional is not made conditional by the fact that the instrument (a) Is subject to implied or constructive conditions; or (b) States its considerations, whether performed or promised, or the transaction which gave rise to the instrument, or t…

(1) The sum payable is a sum certain even though it is to be paid (a) With stated interest or by stated installments; or (b) With stated different rates of interest before and after default or a specified date; or (c) With a stated discount or addition if paid before or after the…

(1) An instrument is payable in money if the medium of exchange in which it is payable is money at the time the instrument is made. An instrument payable in currency or current funds is payable in money. (2) A promise or order to pay a sum stated in a foreign currency is for a su…

Instruments payable on demand include those payable at sight or on presentation and those in which no time for payment is stated.

(1) An instrument is payable at a definite time if by its terms it is payable (a) On or before a stated date or at a fixed period after a stated date; or (b) At a fixed period after sight; or (c) At a definite time subject to any acceleration; or (d) At a definite time subject to…

(1) An instrument is payable to order when by its terms it is payable to the order or assigns of any person therein specified with reasonable certainty, or to him or his order, or when it is conspicuously designated on its face as Aexchange@ or the like and names a payee. It may …

An instrument is payable to bearer when by its terms it is payable to (a) Bearer or the order of bearer; or (b) A specified person or bearer; or (c) "Cash" or the order of Acash,@ or any other indication which does not purport to designate a specific payee.

(1) The negotiability of an instrument is not affected by (a) The omission of a statement of any consideration or of the place where the instrument is drawn or payable; or (b) A statement that collateral has been given to secure obligations either on the instrument or otherwise o…

An instrument otherwise negotiable is within this division even though it is under a seal.

(1) The negotiability of an instrument is not affected by the fact that it is undated, antedated or postdated. (2) Where an instrument is antedated or postdated the time when it is payable is determined by the stated date if the instrument is payable on demand or at a fixed perio…

(1) When a paper whose contents at the time of signing show that it is intended to become an instrument is signed while still incomplete in any necessary respect it cannot be enforced until completed, but when it is completed in accordance with authority given it is effective as …

An instrument payable to the order of two or more persons: (a) If in the alternative is payable to any one of them and may be negotiated, discharged or enforced by any of them who has possession of it; (b) If not in the alternative is payable to all of them and may be negotiated,…

An instrument made payable to a named person with the addition of words describing him (a) As agent or officer of a specified person is payable to his principal but the agent or officer may act as if he were the holder; (b) As any other fiduciary for a specified person or purpose…

The following rules apply to every instrument: (a) Where there is doubt whether the instrument is a draft or a note the holder may treat it as either. A draft drawn on the drawer is effective as a note. COL120106 (b) Handwritten terms control typewritten and printed terms, and ty…

(1) As between the obligor and his immediate obligee or any transferee the terms of an instrument may be modified or affected by any other written agreement executed as a part of the same transaction, except that a holder in due course is not affected by any limitation of his rig…

An instrument which states that it is payable through a bank or the like designates that bank as a collecting bank to make presentment but does not of itself authorize the bank to pay the instrument.

An instrument which states that it is payable at a bank is not of itself an order or authorization to the bank to pay it unless the bank is the drawee. COL120106

(1) A cause of action against a maker or an acceptor accrues: (a) In the case of a time instrument on the day after maturity; (b) In the case of a demand instrument upon its date or, if no date is stated, on the date of issue. (2) A cause of action against the obligor of a demand…

Every instrument is payable at the time fixed therein without grace. When the day of maturity falls upon Sunday, Saturday or a holiday, the instrument is payable on the next succeeding business day which is not a Saturday. Where the day of maturity of the instrument falls on an o…

(1) Transfer of an instrument vests in the transferee such rights as the transferor has therein, except that a transferee who has himself been a party to any fraud or illegality affecting the instrument or who as a prior holder had notice of a defense or claim against it cannot i…

COL120106 (1) Negotiation is the transfer of an instrument in such form that the transferee becomes a holder. If the instrument is payable to order it is negotiated by delivery with any necessary indorsement; if payable to bearer it is negotiated by delivery. (2) An indorsement m…

Where an instrument is made payable to a person under a misspelled name or one other than his own he may indorse in that name or his own or both; but signature in both names may be required by a person paying or giving value for the instrument.

(1) A special indorsement specifies the person to whom or to whose order it makes the instrument payable. Any instrument specially indorsed becomes payable to the order of the special indorsee and may be further negotiated only by his indorsement. (2) An indorsement in blank spec…

An indorsement is restrictive which either (a) Is conditional; or (b) Purports to prohibit further transfer of the instrument; or COL120106 (c) Includes the words Afor collection,@ Afor deposit,@ Apay any bank,@ or like terms signifying a purpose of deposit or collection; or (d) …

(1) No restrictive indorsement prevents further transfer or negotia- tion of the instrument. (2) An intermediary bank, or a payor bank which is not the depositary bank, is neither given notice nor otherwise affected by a restrictive indorsement of any person except the bank's imm…

(1) Negotiation is effective to transfer the instrument although the negotiation is (a) Made by an infant, a corporation exceeding its powers, or any other person without capacity; or COL120106 (b) Obtained by fraud, duress or mistake of any kind; or (c) Part of an illegal transa…

Where an instrument is returned to or reacquired by a prior party he may cancel any indorsement which is not necessary to his title and reissue or further negotiate the instrument, but any intervening party is discharged as against the reacquiring party and subsequent holders not…

The holder of an instrument whether or not he is the owner may transfer or negotiate it and, except as otherwise provided in Section 3603 on payment or satisfaction, discharge it or enforce payment in his own name.

(1) A holder in due course is a holder who takes the instrument (a) For value; and (b) In good faith; and COL120106 (c) Without notice that it is overdue or has been dishonored or of any defense against or claim to it on the part of any person. (2) A payee may be a holder in due …

A holder takes the instrument for value (a) To the extent that the agreed consideration has been performed or that he acquires a security interest in or a lien on the instrument otherwise than by legal process; or (b) When he takes the instrument in payment of or as security for …

(1) The purchaser has notice of a claim or defense if (a) The instrument is so incomplete, bears such visible evidence of forgery or alteration, or is otherwise so irregular as to call into question its validity, terms or ownership or to create an ambiguity as to the party to pay…

To the extent that a holder is a holder in due course he takes the instrument free from COL120106 (1) All claims to it on the part of any person; and (2) All defenses of any party to the instrument with whom the holder has not dealt except (a) Infancy, to the extent that it is a …

Unless he has the rights of a holder in due course any person takes the instrument subject to (1) All valid claims to it on the part of any person; and (2) All defenses of any party which would be available in an action on a simple contract; and (3) The defenses of want or failur…

Course. (1) Unless specifically denied in the pleading each signature on an instrument is admitted. When the effectiveness of a signature is put in issue COL120106 (a) The burden of establishing it is on the party claiming under the signature; but (b) The signature is presumed to…

(1) No person is liable on an instrument unless his signature appears thereon. (2) A signature is made by use of any name, including any trade or assumed name, upon an instrument, or by any word or mark used in lieu of a written signature.

Unless the instrument clearly indicates that a signature is made in some other capacity it is an indorsement.

(1) A signature may be made by an agent or other representative, and his authority to make it may be established as in other cases of representation. No particular form of appointment is necessary to establish such authority. (2) An authorized representative who signs his own nam…

(1) Any unauthorized signature is wholly inoperative as that of the person whose name is signed unless he ratifies it or is precluded from denying it; but it operates as the signature of the unauthorized signer in COL120106 favor of any person who in good faith pays the instrumen…

(1) An indorsement by any person in the name of a named payee is effective if (a) An imposter by use of the mails or otherwise has induced the maker or drawer to issue the instrument to him or his confederate in the name of the payee; or (b) A person signing as or on behalf of a …

Signature. Any person who by his negligence substantially contributes to a material alteration of the instrument or to the making of an unauthorized signature is precluded from asserting the alteration or lack of authority against a holder in due course or against a drawee or oth…

(1) Any alteration of an instrument is material which changes the contract of any party thereto in any respect, including any such change in (a) The number or relations of the parties; or (b) An incomplete instrument, by completing it otherwise than as authorized; or (c) The writ…

Want or failure of consideration is a defense as against any person not having the rights of a holder in due course (Section 3305), except that no consideration is necessary for an instrument or obligation thereon given in payment of or as security for an antecedent obligation of…

(1) A check or other draft does not of itself operate as an assignment of any funds in the hands of the drawee available for its payment, and the drawee is not liable on the instrument until he accepts it. (2) Nothing in this section shall affect any liability in contract, tort o…

(1) Acceptance is the drawee's signed engagement to honor the draft as presented. It must be written on the draft, and may consist of his signature alone. It becomes operative when completed by delivery or notification. (2) A draft may be accepted although it has not been signed …

(1) Certification of a check is acceptance. Where a holder procures certification the drawer and all prior indorsers are discharged. (2) Unless otherwise agreed a bank has no obligation to certify a check. (3) A bank may certify a check before returning it for lack of proper indo…

(1) Where the drawee's proffered acceptance in any manner varies the draft as presented the holder may refuse the acceptance and treat the draft as dishonored in which case the drawee is entitled to have his acceptance canceled. (2) The terms of the draft are not varied by an acc…