Chapter 73 — Chapter 73

ORS 73.0101 Short title. This chapter may be cited as Uniform Commercial Code–Negotiable Instruments. [1993 c.545 §4]

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ORS 73.0102 Application of chapter. (1) This chapter applies to negotiable instruments. This chapter does not apply to money, to payment orders governed by ORS chapter 74, or to securities governed by ORS chapter 78

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ORS 73.0103 Definitions. (1) As used in this chapter

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ORS 73.0104 Negotiable instrument; other definitions. (1) Except as provided in subsections (3) and (4) of this section, “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

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ORS 73.0105 Issue of instrument. (1) “Issue” means

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ORS 73.0106 Unconditional promise or order. (1) Except as provided in this section, for the purposes of ORS 73.0104 (1), a promise or order is unconditional unless it states an express condition to payment, that the promise or order is subject to or governed by another writing, or that rights or obligations with respect to the promise or order are stated in another writing. A reference to another writing does not of itself make the promise or order conditional

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ORS 73.0107 Instrument payable in foreign money. 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 dollars on the day on which the instrument is paid. [1993 c.545 §10]

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ORS 73.0108 Payable on demand or at definite time. (1) A promise or order is “payable on demand” if it

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ORS 73.0109 Payable to bearer or to order. (1) A promise or order is payable to bearer if it

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ORS 73.0110 Identification of person to whom instrument is payable. (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 is identified in the instrument by a name or other identification that is not that of the intended person. If more than one person signs in the name or behalf of the issuer of an instrument and all the signers do not intend the same person as payee, the instrument is payable to any person intended by one or more of the signers

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ORS 73.0111 Place of payment. Except as otherwise provided for items in ORS chapter 74, 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, the place of payment is the place of business of the drawee or maker. If a drawee or maker has more than one place of business, the place of payment is any place of business of the drawee or maker chosen by the person entitled to enforce the instrument. If the drawee or maker has no place of business, the place of payment is the residence of the drawee or maker. [1993 c.545 §14]

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ORS 73.0112 Interest. (1) Unless otherwise provided in the instrument

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ORS 73.0113 Date of instrument. (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 the date. Except as provided in ORS 74.4010 (3), an instrument payable on demand is not payable before the date of the instrument

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ORS 73.0114 Contradictory terms of instrument. If an instrument contains contradictory terms, typewritten terms prevail over printed terms, handwritten terms prevail over both, and words prevail over numbers. [1993 c.545 §17]

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ORS 73.0115 Incomplete instrument. (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

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ORS 73.0116 Joint and several liability; contribution. (1) Except as otherwise provided in the instrument, two or more persons who have the same liability on an instrument as makers, drawers, acceptors, indorsers who indorse as joint payees, or anomalous indorsers are jointly and severally liable in the capacity in which they sign

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ORS 73.0117 Other agreements affecting instrument. Subject to applicable law regarding exclusion of proof of contemporaneous or previous 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 instrument, if the instrument is issued or the obligation is incurred in reliance on the agreement or as part of the same transaction giving rise to the agreement. To the extent an obligation is modified, supplemented or nullified by an agreement under this section, the agreement is a defense to the obligation. [1993 c.545 §20]

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ORS 73.0118 Statute of limitations. (1) Except as provided in subsection (5) of this section, 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 accelerated due date

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ORS 73.0119 Notice of right to defend action. In an action for breach of an obligation over which a third person is answerable pursuant to this chapter or ORS chapter 74, 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 answerable. If the notice states that the person notified may come in and defend and that failure to do so will bind the person notified in an action later brought by the person giving notice as to any determination of fact common to the two litigations, the person notified is so bound unless after seasonable receipt of the notice the person notified does come in and defend. [1993 c.545 §22]

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ORS 73.0201 Negotiation. (1) “Negotiation” means a transfer of possession, whether voluntary or involuntary, of an instrument by a person other than the issuer to a person who thereby becomes its holder

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ORS 73.0202 Negotiation subject to rescission. (1) Negotiation is effective even if obtained

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ORS 73.0203 Transfer of instrument; rights acquired by transfer. (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

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ORS 73.0204 Indorsement. (1) “Indorsement” 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 indorser’s liability on the instrument. Regardless of the intent of the signer, a signature and its accompanying words is an indorsement unless the accompanying words, terms of the instrument, place of the signature or other circumstances unambiguously indicate that the signature was made for a purpose other than indorsement. For the purpose of determining whether a signature is made on an instrument, a paper affixed to the instrument is a part of the instrument

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ORS 73.0205 Special indorsement; blank indorsement; anomalous indorsement. (1) If an indorsement is made by the holder of an instrument, whether payable to an identified person or payable to bearer, and the indorsement identifies a person to whom it makes the instrument payable, it is a “special indorsement.” When specially indorsed, an instrument becomes payable to the identified person and may be negotiated only by the indorsement of that person. The principles stated in ORS 73.0110 apply to special indorsements

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ORS 73.0206 Restrictive indorsement. (1) An indorsement 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

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ORS 73.0207 Reacquisition. Reacquisition of an instrument occurs if it is transferred to a former holder, by negotiation or otherwise. A former holder who reacquires the instrument may cancel indorsements made after the reacquirer first became a holder of the instrument. If the cancellation causes the instrument to be payable to the reacquirer or to bearer, the reacquirer may negotiate the instrument. An indorser whose indorsement is canceled is discharged, and the discharge is effective against any subsequent holder. [1993 c.545 §29]

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ORS 73.0301 Person entitled to enforce instrument. “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 pursuant to ORS 73.0309 or 73.0418 (4). A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument. [1993 c.545 §30]

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ORS 73.0302 Holder in due course. (1) Subject to ORS 73.0106 (3) and (4), “holder in due course” means the holder of an instrument if

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ORS 73.0303 Value and consideration. (1) An instrument is issued or transferred for value if

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ORS 73.0304 Overdue instrument. (1) An instrument payable on demand becomes overdue at the earliest of the following times

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ORS 73.0305 Defenses and claims in recoupment. (1) Except as stated in subsection (2) of this section, the right to enforce the obligation of a party to pay an instrument is subject to the following

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ORS 73.0306 Claims to an instrument. 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 person having rights of a holder in due course takes free of the claim to the instrument. [1993 c.545 §35]

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ORS 73.0307 Notice of breach of fiduciary duty. (1) In this section

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ORS 73.0308 Proof of signatures and status as holder in due course. (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 the person claiming validity, but the signature is presumed to be authentic and authorized unless the action is to enforce the liability of the purported signer and the signer is dead or incompetent at the time of trial of the issue of validity of the signature. If an action to enforce the instrument is brought against a person as the undisclosed principal of a person who signed the instrument as a party to the instrument, the plaintiff has the burden of establishing that the defendant is liable on the instrument as a represented person under ORS 73.0402 (1)

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ORS 73.0309 Enforcement of lost, destroyed or stolen instrument. (1) A person not in possession of an instrument is entitled to enforce the instrument if

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ORS 73.0310 Effect of instrument on obligation for which taken. (1) Unless otherwise agreed, if a certified check, cashier’s check or teller’s check is taken for an obligation, the obligation is discharged to the same extent discharge would result if an amount of money equal to the amount of the instrument were taken in payment of the obligation. Discharge of the obligation does not affect any liability that the obligor may have as an indorser of the instrument

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ORS 73.0311 Accord and satisfaction. The negotiation of an instrument marked “paid in full,” “payment in full,” “full payment of a claim” or words of similar meaning, or the negotiation of an instrument accompanied by a statement containing such words or words of similar meaning, does not establish an accord and satisfaction that binds the payee or prevents the collection of any remaining amount owed upon the underlying obligation unless the payee personally, or by an officer or employee with actual authority to settle claims, agrees in writing to accept the amount stated in the instrument as full payment of the obligation. [1993 c.545 §40; 1997 c.437 §1]

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ORS 73.0312 Lost, destroyed or stolen cashier’s check, teller’s check or certified check. (1) In this section

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ORS 73.0401 Signature necessary for liability on instrument. A person is not liable on an instrument unless

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ORS 73.0402 Signature by representative. (1) If a person acting, or purporting to act, as a representative signs an instrument by signing either the name of the represented person or the name of the signer, the represented person is bound by the signature to the same extent the represented person would be bound if the signature were on a simple contract. If the represented person is bound, the signature of the representative is the “authorized signature of the represented person” and the represented person is liable on the instrument, whether or not identified in the instrument

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ORS 73.0403 Unauthorized signature. (1) Unless otherwise provided in this chapter or ORS chapter 74, an unauthorized signature is ineffective except as the signature of the unauthorized signer in favor of a person who, in good faith, pays the instrument or takes it for value or for collection. An unauthorized signature may be ratified for all purposes of this chapter

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ORS 73.0404 Impostors; fictitious payees. (1) If an impostor, by use of the mails or otherwise, induces the issuer of an instrument to issue the instrument to the impostor, or to a person acting in concert with the impostor, by impersonating the payee of the instrument or a person authorized to act for the payee, an indorsement of the instrument by any person in the name of the payee is effective as the indorsement of the payee in favor of a person who, in good faith, pays the instrument or takes it for value or for collection

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ORS 73.0405 Employer’s responsibility for fraudulent indorsement by employee. (1) In this section

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ORS 73.0406 Negligence contributing to forged signature or alteration of instrument. (1) A person whose failure to exercise ordinary care substantially contributes to an alteration of an instrument or to the making of a forged signature on an instrument is precluded from asserting the alteration or the forgery against a person who, in good faith, pays the instrument or takes it for value or for collection

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ORS 73.0407 Alteration. (1) “Alteration” means

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ORS 73.0408 Drawee not liable on unaccepted draft. A check or other draft does not of itself operate as an assignment of funds in the hands of the drawee available for its payment, and the drawee is not liable on the instrument until the drawee accepts it. [1993 c.545 §49]

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ORS 73.0409 Acceptance of draft; certified check. (1) “Acceptance” means the drawee’s signed agreement to pay a draft as presented. It must be written on the draft and may consist of the drawee’s signature alone. Acceptance may be made at any time and becomes effective when notification pursuant to instructions is given or the accepted draft is delivered for the purpose of giving rights on the acceptance to any person

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ORS 73.0410 Acceptance varying draft. (1) If the terms of a drawee’s acceptance vary from the terms of the draft as presented, the holder may refuse the acceptance and treat the draft as dishonored. In that case, the drawee may cancel the acceptance

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ORS 73.0411 Refusal to pay cashier’s checks, teller’s checks and certified checks. (1) In this section, “obligated bank” means the acceptor of a certified check or the issuer of a cashier’s check or teller’s check bought from the issuer

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ORS 73.0412 Obligation of issuer of note or cashier’s check. The issuer of a note or cashier’s check or other draft drawn on the drawer is obliged to pay the instrument according to its terms at the time it was issued or, if not issued, at the time it first came into possession of a holder, or if the issuer signed an incomplete instrument, according to its terms when completed, to the extent stated in ORS 73.0115 and 73.0407. The obligation is owed to a person entitled to enforce the instrument or to an indorser who paid the instrument under ORS 73.0115. [1993 c.545 §53]

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