[Previous] [Next]
§12A-3-106.
§12A-3-106.
UNCONDITIONAL PROMISE OR ORDER
(a) Except as provided in this section, for the purposes of subsection
(a) of Section 3-104 of this title, a promise or order is
unconditional unless it states (i) an express condition to payment,
(ii) that the promise or order is subject to or governed by another
writing, or (iii) 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.
(b) A promise or order is not made conditional (i) by a reference to
another writing for a statement of rights with respect to collateral,
prepayment, or acceleration, or (ii) because payment is limited to
resort to a particular fund or source.
(c) If a promise or order requires, as a condition to payment, a
countersignature by a person whose specimen signature appears on the
promise or order, the condition does not make the promise or order
conditional for the purposes of subsection (a) of Section 3-104 of
this title. If the person whose specimen signature appears on an
instrument fails to countersign the instrument, the failure to
countersign is a defense to the obligation of the issuer, but the
failure does not prevent a transferee of the instrument from becoming
a holder of the instrument.
(d) If a promise or order at the time it is issued or first comes into
possession of a holder contains a statement, required by applicable
statutory or administrative law, to the effect that the rights of a
holder or transferee are subject to claims or defenses that the issuer
could assert against the original payee, the promise or order is not
thereby made conditional for the purposes of subsection (a) of Section
3-104 of this title; but if the promise or order is an instrument,
there cannot be a holder in due course of the instrument.
[Previous] [Next]