Negotiation Effective Although It May Be Rescinded

Negotiation Effective Although It May Be Rescinded.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, duress or mistake of any kind; or (c) Part of an illegal transaction; or (d) Made in breach of duty. (2) Except as against a subsequent holder in due course such negotiation is in an appropriate case subject to rescission, the declaration of a constructive trust or any other remedy permitted by law. Source: PL 3-56, § 1 (§ 3207).