Title 5, Uniform Commercial Code

Release of Collateral; Duties of Filing Officer; Fees. A secured party of record may by his signed statement release all or a part of any collateral described in a filed financing statement. The statement of release is sufficient if it contains a description of the collateral bei…

Information From Filing Officer. (1) If the person filing any financing statement, termination statement, statement of assignment, or statement of release, furnishes the filing officer a copy thereof, the filing officer shall upon request note upon the copy the file number and da…

Financing Statements Covering Consigned or Leased Goods. A consignor or lessor of goods may file a financing statement using the terms “consignor,” “consignee,” “lessor,” “lessee” or the like instead of the terms specified in 5 CMC § 9402. The provisions of this chapter shall app…

Recording on Microfilm. In lieu of filing all financing statements, termination statements, partial releases, assignments, or other related papers falling under this title, the filing officer may record such papers. He may employ a system of microphotography. All film used in the…

Consecutive File Numbers. Should the filing officer choose to record rather than file all financing statements and related papers, he shall mark each financing statement with a consecutive file number. All other related papers affecting such financing statement shall thereafter b…

Originals Returned. Upon recording the financing statement or other related papers, the originals or copy of the same shall be returned to the parties entitled thereto. Source: PL 3-56, § 1 (§ 9411).

Insurable Interest in Goods; Manner of Identification of Goods. (1) The buyer obtains a special property and an insurable interest in goods by identification of existing goods as goods to which the contract refers even though the goods so identified are non-conforming and he has …

Buyer’s Right to Goods on Seller’s Insolvency. (1) Subject to subsection (2) of this section and even though the goods have not been shipped a buyer who has paid a part or all of the price of goods in which he has a special property under the provisions of the immediately precedi…

Manner of Seller’s Tender of Delivery. (1) Tender of delivery requires that the seller put and hold conforming goods at the buyer’s disposition and give the buyer any notification reasonably necessary to enable him to take delivery. The manner, time and place for tender are deter…

Shipment by Seller. Where the seller is required or authorized to send the goods to the buyer and the contract does not require him to deliver them at a particular destination, then unless otherwise agreed he must: (a) Put the goods in the possession of such a carrier and make su…

Seller’s Shipment Under Reservation. (1) Where the seller has identified goods to the contract by or before shipment: (a) His procurement of a negotiable bill of lading to his own order or otherwise reserves in him a security interest in the goods. His procurement of the bill to …

Rights of Financing Agency. (1) A financing agency by paying or purchasing for value a draft which relates to a shipment of goods acquires to the extent of the payment or purchase and in addition to its own rights under the draft and any document of title securing it any rights o…

Effect of Seller’s Tender; Delivery on Condition. (1) Tender of delivery is a condition to the buyer’s duty to accept the goods and, unless otherwise agreed, to his duty to pay for them. Tender entitles the seller to acceptance of the goods and to payment according to the contrac…

Cure by Seller of Improper Tender or Delivery; Replacement. (1) Where any tender or delivery by the seller is rejected because nonconforming and the time for performance has not yet expired, the seller may seasonably notify the buyer of his intention to cure and may then within t…

Risk of Loss in the Absence of Breach. (1) Where the contract requires or authorizes the seller to ship the goods by carrier: (a) If it does not require him to deliver them at a particular destination, the risk of loss passes to the buyer when the goods are duly delivered to the …

Effect of Breach on Risk of Loss. (1) Where a tender or delivery of goods so fails to conform to the contract as to give a right of rejection the risk of their loss remains on the seller until cure or acceptance. (2) Where the buyer rightfully revokes acceptance he may to the ext…

Tender of Payment by Buyer; Payment by Check. (1) Unless otherwise agreed tender of payment is a condition to the seller’s duty to tender and complete any delivery. (2) Tender of payment is sufficient when made by any means or in any manner current in the ordinary course of busin…

Payment by Buyer Before Inspection. (1) Where the contract requires payment before inspection non-conformity of the goods does not excuse the buyer from so making payment unless: (a) The non-conformity appears without inspection; or (b) Despite tender of the required documents th…

Buyer’s Right to Inspection of Goods. (1) Unless otherwise agreed and subject to subsection (3) of this section, where goods are tendered or delivered or identified to the contract for sale, the buyer has a right before payment or acceptance to inspect them at any reasonable plac…

When Documents Deliverable on Acceptance; When on Payment. Unless otherwise agreed documents against which a draft is drawn are to be delivered to the drawee on acceptance of the draft if it is payable more than three days after presentment; otherwise, only on payment. Source: PL…

Preserving Evidence of Goods in Dispute. In furtherance of the adjustment of any claim or dispute: (a) Either party on reasonable notification to the other and for the purpose of ascertaining the facts and preserving evidence has the right to inspect, test and sample the goods in…

When Presentment, Notice of Dishonor, and Protest Necessary or Permissible. (1) Unless excused (5 CMC § 3511) presentment is necessary to charge secondary parties as follows: (a) Presentment for acceptance is necessary to charge the drawer and indorsers of a draft where the draft…

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 payable at a bank…

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 before the date it …

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 time of receipt of…

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 made for another; …

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 discharge of se…

Dishonor; Holder’s Right of Recourse; Term Allowing RePresentment. (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 bank collections t…

Notice of Dishonor. (1) Notice of dishonor may be given to any person who may be liable on the instrument by or on behalf of the holder or any party who has himself received notice, or any other party who can be compelled to pay the instrument. In addition an agent or bank in who…

Protest; Noting for Protest. (1) A protest is a certificate of dishonor made under the hand and seal of a United States consul or vice consul or a notary public or other person authorized to certify dishonor by the law of the place where dishonor occurs. It may be made upon infor…

Evidence of Dishonor and Notice of Dishonor. The following are admissible as evidence and create a presumption of dishonor and of any notice of dishonor therein shown: (a) A document regular in form as provided in 5 CMC § 3509 which purports to be a protest; (b) The purported sta…

Waived or Excused Presentment, Protest or Notice of Dishonor or Delay Therein. (1) Delay in presentment, protest or notice of dishonor is excused when the party is without notice that it is due or when the delay is caused by circumstances beyond his control and he exercises reaso…

Handling of Documentary Drafts; Duty to Send for Presentment and to Notify Customer of Dishonor. A bank which takes a documentary draft for collection must present or send the draft and accompanying documents for presentment and upon learning that the draft has not been paid or a…

Presentment of “On Arrival” Drafts. When a draft or the relevant instructions require presentment “on arrival,” “when goods arrive” or the like, the collecting bank need not present until in its judgment a reasonable time for arrival of the goods has expired. Refusal to pay or ac…

Responsibility of Presenting Bank for Documents and Goods; Report of Reasons for Dishonor; Referee in Case of Need. Unless otherwise instructed and except as provided in division 5 of this title [5 CMC § 5101 et seq.] a bank presenting a documentary draft: (a) Must deliver the do…

Privilege of Presenting Bank to Deal With Goods; Security Interest for Expenses. (1) A presenting bank which, following the dishonor of a documentary draft, has seasonably requested instructions but does not receive them within a reasonable time may store, sell, or otherwise deal…

Form of Negotiation and Requirements of “Due Negotiation.” (1) A negotiable document of title running to the order of a named person is negotiated by his indorsement and delivery. After his indorsement in blank or to bearer any person can negotiate it by delivery alone. (2)(a) A …

Rights Acquired by Due Negotiation. (1) Subject to the 5 CMC § 7503 and to the provisions of 5 CMC § 7205 on fungible goods, a holder to whom a negotiable document of title has been duly negotiated acquires thereby: (a) Title to the document; (b) Title to the goods; (c) All right…

Document of Title to Goods Defeated in Certain Cases. (1) A document of title confers no right in goods against a person who before issuance of the document had a legal interest or a perfected security interest in them and who neither: (a) Delivered or entrusted them or any docum…

Rights Acquired in the Absence of Due Negotiation; Effect of Diversion; Seller’s Stoppage of Delivery. (1) A transferee of a document, whether negotiable or non-negotiable, to whom the document has been delivered but not duly negotiated, acquires the title and rights which his tr…

Indorser Not a Guarantor for Other Parties. The indorsement of a document of title issued by a bailee does not make the indorser liable for any default by the bailee or by previous indorsers. Source: PL 3-56, § 1 (§ 7505).

Delivery Without Indorsement: Right to Compel Indorsement. The transferee of a negotiable document of title has a specifically enforceable right to have his transferor supply any necessary indorsement but the transfer becomes a negotiation only as of the time the indorsement is s…

Warranties on Negotiation or Transfer of Receipt or Bill. Where a person negotiates or transfers a document of title for value otherwise than as a mere intermediary under 5 CMC § 7508, then unless otherwise agreed he warrants to his immediate purchaser only in addition to any war…

Warranties of Collecting Bank as to Documents. A collecting bank or other intermediary known to be entrusted with documents on behalf of another or with collection of a draft or other claim against delivery of documents warrants by such delivery of the documents only its own good…

Receipt or Bill: When Adequate Compliance With Commercial Contract. The question whether a document is adequate to fulfill the obligations of a contract for sale or the conditions of a credit is governed by the divisions on sales (division 2 of this title [5 CMC § 2101 et seq.]) …

Default; Procedure when Security Agreement Covers Both Real and Personal Property. (1) When a debtor is in default under a security agreement, a secured party has the rights and remedies provided in this chapter and except as limited by subsection (3) of this section those provid…