Title UCC, Uniform Commercial Code

Section 3--114. Date, Antedating, Postdating. (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 instr…

Section 3--115. Incomplete Instruments. (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 …

Section 3--116. Instruments Payable to Two or More Persons. 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 a…

Section 3--117. Instruments Payable With Words of Description. 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 holde…

Section 3--118. Ambiguous Terms and Rules of Construction. 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. (b) Handwritten te…

Section 3--119. Other Writings Affecting Instrument. (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 du…

Section 3--120. Instruments "Payable Through" Bank. 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.

Section 3--121. Instruments Payable at Bank. A note or acceptance which states that it is payable at a bank is the equivalent of a draft drawn on the bank payable when it falls due out of any funds of the maker or acceptor in current account or otherwise available for such paymen…

Section 3--122. Accrual of Cause of Action. (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 caus…

Section 3--201. Transfer: Right to Indorsement. (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…

Section 3--202. Negotiation. (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. …

Section 3--203. Wrong or Misspelled Name. 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 instr…

Section 3--204. Special Indorsement; Blank Indorsement. (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 o…

Section 3--205. Restrictive Indorsements. An indorsement is restrictive which either (a) is conditional; or (b) purports to prohibit further transfer of the instrument; or (c) includes the words "for collection", "for deposit", "pay any bank", or like terms signifying a purpose o…

Section 3--206. Effect of Restrictive Indorsement. (1) No restrictive indorsement prevents further transfer or negotiation 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 restrictiv…

Section 3--207. Negotiation Effective Although It May Be Rescinded. (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 (b) obtained by fraud, dures…

Section 3--208. Reacquisition. 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 p…

Section 3--301. Rights of a Holder. The holder of an instrument whether or not he is the owner may transfer or negotiate it and, except as otherwise provided in Section 3--603 on payment or satisfaction, discharge it or enforce payment in his own name.

Section 3--302. Holder in Due Course. (1) A holder in due course is a holder who takes the instrument (a) for value; and (b) in good faith; and (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 p…

Section 3--303. Taking for Value. 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…

Section 3--304. Notice to Purchaser. (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 creat…

Section 3--305. Rights of a Holder in Due Course. To the extent that a holder is a holder in due course he takes the instrument free from (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 …

Section 3--306. Rights of One Not Holder in Due Course. Unless he has the rights of a holder in due course any person takes the instrument subject to (a) all valid claims to it on the part of any person; and (b) all defenses of any party which would be available in an action on a…

Section 3--307. Burden of Establishing Signatures, Defenses and Due Course. (1) Unless specifically denied in the pleadings each signature on an instrument is admitted. When the effectiveness of a signature is put in issue (a) the burden of establishing it is on the party claimin…

Section 3--401. Signature. (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.

Section 3--402. Signature in Ambiguous Capacity. Unless the instrument clearly indicates that a signature is made in some other capacity it is an indorsement.

Section 3--403. Signature by Authorized Representative. (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…

Section 3--404. Unauthorized Signatures. (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 favor of any person who i…

Section 3--405. Impostors; Signature in Name of Payee. (1) An indorsement by any person in the name of a named payee is effective if (a) an impostor 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 t…

Section 3--406. Negligence Contributing to Alteration or Unauthorized 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 …

Section 3--407. Alteration. (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…

Section 3--408. Consideration. Want or failure of consideration is a defense as against any person not having the rights of a holder in due course (Section 3--305), except that no consideration is necessary for an instrument or obligation thereon given in payment of or as securit…

Section 3--409. Draft Not an Assignment. (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…

Section 3--410. Definition and Operation of Acceptance. (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) …

Section 3--411. Certification of a Check. (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 b…

Section 3--412. Acceptance Varying Draft. (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 cancelled. (2) The …

Section 3--413. Contract of Maker, Drawer and Acceptor. (1) The maker or acceptor engages that he will pay the instrument according to its tenor at the time of his engagement or as completed pursuant to Section 3--115 on incomplete instruments. (2) The drawer engages that upon di…

Section 3--414. Contract of Indorser; Order of Liability. (1) Unless the indorsement otherwise specifies (as by such words as "without recourse") every indorser engages that upon dishonor and any necessary notice of dishonor and protest he will pay the instrument according to its…

Section 3--415. Contract of Accommodation Party. (1) An accommodation party is one who signs the instrument in any capacity for the purpose of lending his name to another party to it. (2) When the instrument has been taken for value before it is due the accommodation party is lia…

Section 3--416. Contract of Guarantor. (1) "Payment guaranteed" or equivalent words added to a signature mean that the signer engages that if the instrument is not paid when due he will pay it according to its tenor without resort by the holder to any other party. (2) "Collection…

Section 3--417. Warranties on Presentment and Transfer. (1) Any person who obtains payment or acceptance and any prior transferor warrants to a person who in good faith pays or accepts that (a) he has a good title to the instrument or is authorized to obtain payment or acceptance…

Section 3--418. Finality of Payment or Acceptance. Except for recovery of bank payments as provided in the Article on Bank Deposits and Collections (Article 4) and except for liability for breach of warranty on presentment under the preceding section, payment or acceptance of any…

Section 3--419. Conversion of Instrument; Innocent Representative. (1) An instrument is converted when (a) a drawee to whom it is delivered for acceptance refuses to return it on demand; or (b) any person to whom it is delivered for payment refuses on demand either to pay or to r…

Section 3--501. When Presentment, Notice of Dishonor, and Protest Necessary or Permissible. (1) Unless excused (Section 3--511) presentment is necessary to charge secondary parties as follows: (a) presentment for acceptance is necessary to charge the drawer and indorsers of a dra…

Section 3--502. Unexcused Delay; Discharge. (1) Where without excuse any necessary presentment or notice of dishonor is delayed beyond the time when it is due (a) any indorser is discharged; and (b) any drawer or the acceptor of a draft payable at a bank or the maker of a note pa…

Section 3--503. Time of Presentment. (1) Unless a different time is expressed in the instrument the time for any presentment is determined as follows: (a) where an instrument is payable at or a fixed period after a stated date any presentment for acceptance must be made on or bef…

Section 3--504. How Presentment Made. (1) Presentment is a demand for acceptance or payment made upon the maker, acceptor, drawee or other payor by or on behalf of the holder. (2) Presentment may be made (a) by mail, in which event the time of presentment is determined by the tim…

Section 3--505. Rights of Party to Whom Presentment Is Made. (1) The party to whom presentment is made may without dishonor require (a) exhibition of the instrument; and (b) reasonable identification of the person making presentment and evidence of his authority to make it if mad…

Section 3--506. Time Allowed for Acceptance or Payment. (1) Acceptance may be deferred without dishonor until the close of the next business day following presentment. The holder may also in a good faith effort to obtain acceptance and without either dishonor of the instrument or…

Section 3--507. Dishonor; Holder's Right of Recourse; Term Allowing Re-Presentment. (1) An instrument is dishonored when (a) a necessary or optional presentment is duly made and due acceptance or payment is refused or cannot be obtained within the prescribed time or in case of ba…