Title 5, Uniform Commercial Code

Short Title. This title may be cited as the Uniform Commercial Code of the Northern Mariana Islands. Source: PL 3-56, § 1 (§ 1101). Commission Comment: PL 3-56, which was enacted on May 23, 1983, but took effect on June 1, 1983 (see 5 CMC § 10101), is almost verbatim the Uniform …

Purposes; Rules of Construction; Variation by Agreement. (1) This title shall be liberally construed and applied to promote its underlying purposes and policies. (2) Underlying purposes and policies of this title are: (a) To simplify, clarify and modernize the law governing comme…

Supplementary General Principles of Law Applicable. Unless displaced by the particular provisions of this title, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, dur…

Construction Against Implicit Repeal. This title being a general act intended as a unified coverage of its subject matter, no part of it shall be deemed to be impliedly repealed by subsequent legislation if such construction can reasonably be avoided. Source: PL 3-56, § 1 (§ 1104…

Territorial Application of the Act; Parties’ Power to Choose Applicable Law. (1) Except as provided hereafter in this section, when a transaction bears a reasonable relation to this Commonwealth and also to another territory, state or nation the parties may agree that the law eit…

Remedies to Be Liberally Administered. (1) The remedies provided by this title shall be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed but neither consequential or special nor penal damages may…

Waiver or Renunciation of Claim or Right After Breach. Any claim or right arising out of an alleged breach can be discharged in whole or in part without consideration by a written waiver or renunciation signed and delivered by the aggrieved party. Source: PL 3-56, § 1 (§ 1107).

Severability. If any provision or clause of this title or application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the title which can be given effect without the invalid provision or application, and…

Section Captions. Section captions are parts of this title. Source: PL 3-56, § 1 (§ 1109).

Short Title. This division may be cited as Uniform Commercial Code—Sales. Source: PL 3-56, § 1 (§ 2101).

Scope; Certain Security and Other Transactions Excluded From This Division. Unless the context otherwise requires, this division applies to transactions in goods; it does not apply to any transaction which although in the form of an unconditional contract to sell or present sale …

Definitions and Index of Definitions. (1) In this division unless the context otherwise requires: (a) “Buyer” means a person who buys or contracts to buy goods. (b) “Good faith” in the case of a merchant means honesty in fact and the observance of reasonable commercial standards …

Definitions: “Merchant”; “Between Merchants”; “Financing Agency.” (1) “Merchant” means a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom s…

Definitions: Transferability; “Goods”; “Future” Goods; “Lot”; “Commercial Unit.” (1) “Goods” means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, i…

Definitions: “Contract”; “Agreement”; “Contract for Sale”; “Sale”; “Present Sale”; “Conforming” to Contract; “Termination”; “Cancellation.” (1) In this division unless the context otherwise requires “contract” and “agreement” are limited to those relating to the present or future…

Goods to Be Severed From Realty: Recording. (1) A contract for the sale of minerals or the like (including oil and gas) or a structure or its materials to be removed from realty is a contract for the sale of goods within this division if they are to be severed by the seller but u…

Short Title. This division may be cited as Uniform Commercial Code—Commercial Paper. Source: PL 3-56, § 1 (§ 3101).

Definitions and Index of Definitions. (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 ident…

Limitations on Scope of Division. (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 of this title [5 CMC § 4101 et …

Form of Negotiable Instruments; “Draft”; “Check”; “Certificate of Deposit”; “Note.” (1) Any writing to be a negotiable instrument within this division must: (a) Be signed by the maker or drawer; and (b) Contain an unconditional promise or order to pay a sum certain in money and n…

When Promise or Order Unconditional. (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 consideration, whether performed or promised, or the transaction wh…

Sum Certain. (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 befor…

Money. (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 …

Payable on Demand. Instruments payable on demand include those payable at sight or on presentation and those in which no time for payment is stated. Source: PL 3-56, § 1 (§ 3108).

Definite Time. (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…

Payable to Order. (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 “exchange” or the like and name…

Payable to Bearer. 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 “cash,” or any other indication which does not purport to designate a specific payee. So…

Terms and Omissions Not Affecting Negotiability. (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 o…

Seal. An instrument otherwise negotiable is within this division even though it is under a seal. Source: PL 3-56, § 1 (§ 3113).

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 instrument is payable…

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 with authority g…

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 alternative is p…

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 holder; (b) As any o…

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 terms control type…

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 due course is not …

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. Source: PL 3-56, § 1 (§ 3120).

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 payment. Source: PL 3-…

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 cause of action aga…

Short Title. This division may be cited as Uniform Commercial Code—Bank Deposits and Collections. Source: PL 3-56, § 1 (§ 4101).

Applicability. (1) To the extent that items within this division are also within the scope of divisions 3 [5 CMC § 3101 et seq.] and 8 [5 CMC § 8101 et seq.] of this title, they are subject to the provisions of those divisions. In the event of conflict the provisions of this divi…

Variation by Agreement; Measure of Damages; Certain Action Constituting Ordinary Care. (1) The effect of the provisions of this division may be varied by agreement except that no agreement can disclaim a bank’s responsibility for its own lack of good faith or failure to exercise …

Definitions and Index of Definitions. (1) In this division unless the context otherwise requires: (a) “Account” means any account with a bank and includes a checking, time, interest or savings account; (b) “Afternoon” means the period of a day between noon and midnight; (c) “Bank…

“Depositary Bank”; “Intermediary Bank”; “Collecting Bank”; “Payor Bank”; “Presenting Bank”; “Remitting Bank.” In this division unless the context otherwise requires: (a) “Depositary bank” means the first bank to which an item is transferred for collection even though it is also t…

Separate Office of a 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 notices or orders shall be given under this division and under division 3 of this…

Time of Receipt of Items. (1) For the purpose of allowing time to process items, prove balances and make the necessary entries on its books to determine its position for the day, a bank may fix an afternoon hour of two p.m. or later as a cut-off hour for the handling of money and…

Delays. (1) Unless otherwise instructed, a collecting bank in a good faith effort to secure payment may, in the case of specific items and with or without the approval of any person involved, waive, modify or extend time limits imposed or permitted by this title for a period not …