Title 41 — Uniform Commercial Code

1. When the seller discovers the buyer to be insolvent, the seller may refuse delivery except for cash including payment for all goods theretofore delivered under the contract, and stop delivery under this chapter (section 41-02-84). 2. If the seller discovers that the buyer has …

If the buyer wrongfully rejects or revokes acceptance of goods or fails to make a payment due on or before delivery or repudiates with respect to a part or the whole, then with respect to any goods directly affected and, if the breach is of the whole contract (section 41-02-75), …

1. The seller may stop delivery of goods in the possession of a carrier or other bailee when the seller discovers the buyer to be insolvent (section 41-02-81) and may stop delivery of carload, truckload, planeload, or larger shipments of express or freight when the buyer repudiat…

1. Under the conditions stated in section 41-02-82 on seller's remedies, the seller may resell the goods concerned or the undelivered balance thereof. If the resale is made in good faith and in a commercially reasonable manner, the seller may recover the difference between the re…

1. A "person in the position of a seller" includes as against a principal an agent who has paid or becomes responsible for the price of goods on behalf of the agent's principal or anyone who otherwise holds a security interest or other right in goods similar to that of a seller. …

1. Subject to subsection 2 and to the provisions of this chapter with respect to proof of market price (section 41-02-102), the measure of damages for nonacceptance or repudiation by the buyer is the difference between the market price at the time and place for tender and the unp…

1. When the buyer fails to pay the price as it becomes due, the seller may recover, together with any incidental damages under section 41-02-89, the price: a. Of goods accepted or of conforming goods lost or damaged within a commercially reasonable time after risk of their loss h…

Incidental damages to an aggrieved seller include any commercially reasonable charges, expenses, or commissions incurred in stopping delivery, in the transportation, care, and custody of goods after the buyer's breach, in connection with return or resale of the goods, or otherwis…

1. After a breach within section 41-02-90, the buyer may "cover" by making in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due from the seller. 2. The buyer may recover from the seller as damages the …

1. Subject to the provisions of this chapter with respect to proof of market price (section 41-02-102), the measure of damages for nondelivery or repudiation by the seller is the difference between the market price at the time when the buyer learned of the breach and the contract…

1. When the buyer has accepted goods and given notification (subsection 3 of section 41-02-70), the buyer may recover as damages for any nonconformity of tender the loss resulting in the ordinary course of events from the seller's breach as determined in any manner which is reaso…

1. Incidental damages resulting from the seller's breach include expenses reasonably incurred in inspection, receipt, transportation, and care and custody of goods rightfully rejected, any commercially reasonable charges, expenses, or commissions in connection with effecting cove…

1. Specific performance may be decreed if the goods are unique or in other proper circumstances. 2. The decree for specific performance may include such terms and conditions as to payment of the price, damages, or other relief as the court may deem just. 3. The buyer has a right …

The buyer on notifying the seller of the buyer's intention to do so may deduct all or any part of the damages resulting from any breach of the contract from any part of the price still due under the same contract.

1. Damages for breach by either party may be liquidated in the agreement but only at an amount which is reasonable in the light of the anticipated or actual harm caused by the breach, the difficulties of proof of loss, and the inconvenience or nonfeasibility of otherwise obtainin…

1. Subject to the provisions of subsections 2 and 3 of this section and of section 41-02-97 on liquidation and limitation of damages: a. The agreement may provide for remedies in addition to or in substitution for those provided in this chapter and may limit or alter the measure …

Unless the contrary intention clearly appears, expressions of "cancellation" or "rescission" of the contract or the like shall not be construed as a renunciation or discharge of any claim in damages for an antecedent breach.

This chapter may be cited as Uniform Commercial Code - Negotiable Instruments.

1. This chapter applies to negotiable instruments. It does not apply to money, to payment orders governed by chapter 41-04.1, or to securities governed by chapter 41-08. 2. In the event of conflict between this chapter and chapter 41-04 or 41-09, chapters 41-04 and 41-09 prevail …

1. In this chapter: a. "Acceptor" means a drawee that has accepted a draft. b. "Drawee" means a person ordered in a draft to make payment. c. "Drawer" means a person who signs or is identified in a draft as a person ordering payment. d. Reserved. e. "Maker" means a person who sig…

1. "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: a. Is payable to bearer or to order at the time it is issued or first comes into possession of a …

1. "Issue" means: a. 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 b. If agreed by the payee, the first transmission by the drawer to the payee of an image of an i…

1. Except as provided in this section, for the purposes of subsection 1 of section 41-03-04, a promise or order is unconditional unless it states an express condition to payment or states that the promise or order is subject to or governed by another writing or that rights or obl…

Unless the instrument otherwise provides, an instrument that states the amount payable in foreign money may be paid in the foreign money or in an equivalent amount in dollars calculated by using the current bank-offered spot rate at the place of payment for the purchase of dollar…

1. A promise or order is "payable on demand" if it states that it is payable on demand or at sight, or otherwise indicates that it is payable at the will of the holder, or if it does not state any time of payment. 2. A promise or order is "payable at a definite time" if it is pay…

1. A promise or order is payable to bearer if it meets any of the following conditions: a. States that it is payable to bearer or to the order of bearer or otherwise indicates that the person in possession of the promise or order is entitled to payment. b. Does not state a payee.…

1. The person to whom an instrument is initially payable is determined by the intent of the person, whether or not authorized, signing as or in the name or behalf of the issuer of the instrument. The instrument is payable to the person intended by the signer even if that person i…

Except as otherwise provided for items in chapter 41-04, an instrument is payable at the place of payment stated in the instrument. If no place of payment is stated, an instrument is payable at the address of the drawee or maker stated in the instrument. If no address is stated, …

1. Unless otherwise provided in the instrument, an instrument is not payable with interest and interest on an interest-bearing instrument is payable from the date of the instrument. 2. Interest may be stated in an instrument as a fixed or variable amount of money or it may be exp…

1. An instrument may be antedated or postdated. The date stated determines the time of payment if the instrument is payable at a fixed period after date. Except as provided in subsection 3 of section 41-04-28, an instrument payable on demand is not payable before the date of the …

If an instrument contains contradictory terms, typewritten terms prevail over printed terms, handwritten terms prevail over both, and words prevail over numbers.

1. "Incomplete instrument" means a signed writing, whether or not issued by the signer, the contents of which show at the time of signing that it is incomplete but that the signer intended it to be completed by the addition of words or numbers. 2. Subject to subsection 3, if an i…

1. Except as otherwise provided in the instrument, two or more persons who have the same liability on an instrument as makers, drawers, acceptors, endorsers who are endorsing joint payees, or anomalous endorsers are jointly and severally liable in the capacity in which they sign.…

Subject to applicable law regarding exclusion of proof of contemporaneous or prior agreements, the obligation of a party to an instrument to pay the instrument may be modified, supplemented, or nullified by a separate agreement of the obligor and a person entitled to enforce the …

1. Except as provided in subsection 5, an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six years after the due date or dates stated in the note or, if a due date is accelerated, within six years after the accelerate…

In an action for breach of an obligation for which a third person is answerable over under this chapter or chapter 41-04, the defendant may give the third person written notice of the litigation, and the person notified may then give similar notice to any other person who is answ…

1. "Negotiation" means a transfer of possession, whether voluntary or involuntary, of an instrument to a person who thereby becomes its holder, if possession is obtained from a person other than the issuer of the instrument. 2. Except for negotiation by a remitter, if an instrume…

1. Negotiation is effective even if obtained from an infant, a corporation exceeding its powers, or a person without capacity, by fraud, duress, or mistake, or in breach of duty or as part of an illegal transaction. 2. To the extent permitted by other law, negotiation may be resc…

1. An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument. 2. Transfer of an instrument, regardless of whether the transfer is a negotiation, vests in the t…

1. "Endorsement" means a signature, other than that of a signer as maker, drawer, or acceptor, that alone or accompanied by other words is made on an instrument for the purpose of negotiating the instrument, restricting payment of the instrument, or incurring endorser's liability…

1. An endorsement limiting payment to a particular person or otherwise prohibiting further transfer or negotiation of the instrument is not effective to prevent further transfer or negotiation of the instrument. 2. An endorsement stating a condition to the right of the endorsee t…

Reacquisition of an instrument occurs if it is transferred, by negotiation or otherwise, to a former holder. A former holder that reacquires the instrument may cancel endorsements made after the reacquirer first became a holder of the instrument. If the cancellation causes the in…

"Person entitled to enforce" an instrument means the holder of the instrument, a nonholder in possession of the instrument who has the rights of a holder, or a person not in possession of the instrument who is entitled to enforce the instrument under section 41-03-35 or subsectio…

1. Subject to subsection 3 and to subsection 4 of section 41-03-06, "holder in due course" means the holder of an instrument if: a. The instrument when issued or negotiated to the holder does not bear such apparent evidence of forgery or alteration or is not otherwise so irregula…

1. An instrument is issued or transferred for value if any of the following exist: a. The instrument is issued or transferred for a promise of performance, to the extent the promise has been performed. b. The transferee acquires a security interest or other lien in the instrument…

1. An instrument payable on demand becomes overdue at the earliest of the following times: a. On the day after the day demand for payment is duly made. b. If the instrument is a check, ninety days after its date. c. If the instrument is not a check, when the instrument has been o…

1. Except as stated in subsection 2, the right to enforce the obligation of a party to pay the instrument is subject to the following: a. A defense of the obligor based on infancy of the obligor to the extent it is a defense to a simple contract, duress, lack of legal capacity, o…

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 recover the instrument or its proceeds. A perso…

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. In the case of an instrument payable to the represented person of the fiduciary, as such, the taker has…

1. 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 signature is denied in the pleadings, the burden of establishing validity is on …