What is Article 3 of UCC?
What is Article 3 of UCC?
Article 3 of the Uniform Commercial Code (UCC) covers commercial paper but explicitly excludes money, documents of title, and investment securities. Documents of title include bills of lading and warehouse receipts and are governed by Article 7 of the UCC.
How long is statute of limitations in Article 3 of the UCC for most actions involving negotiable instruments?
(a) Except as provided in subsection (e), 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.
What does enforcing an instrument mean?
Person entitled to enforce an instrument means (i) the holder of the instrument, (ii) a remitter in possession of the instrument, if the remitter has neither transferred nor negotiated the instrument, (iii) a nonholder in possession of the instrument who has the rights of a holder, or (iiiv) a person not in possession …
What is a check UCC?
(f) “Check” means (i) a draft, other than a documentary draft, payable on demand and drawn on a bank or (ii) a cashier’s check or teller’s check. An instrument may be a check even though it is described on its face by another term, such as “money order.” A certificate of deposit is a note of the bank.
What are the requirements for negotiability?
Overview
- It must be in writing.
- It must be signed by the maker or drawer.
- It must be an unconditional promise or order to pay.
- It must be for a fixed amount in money.
- It must be payable on demand or at a definite time.
- It must be payable to order or bearer, unless it is a check.
What is the difference between articles 3 and 4 of the UCC?
Provisions of Article 3 of the UCC govern negotiable instruments. Article 4 of the UCC deals with the liability of a bank for action or non-action with respect to an item handled by it for purposes of presentment, payment, or collection.
What does the UCC not cover?
Basically, the broad categories that are not covered are transactions involving the sale of real estate, transactions involving the sale of businesses (although other articles of the UCC can and will apply), and transactions involving “intangibles, such as goodwill, patents, trademarks, and copyrights.”
What makes someone a holder in due course?
In commercial law, a holder in due course is someone who takes a negotiable instrument in a value-for-value exchange without reason to doubt its legitimacy. A holder in due course acquires the right to make a claim for the instrument’s value against its originator and intermediate holders.
What are the conditions of negotiability Why are they important?
The concept of negotiability is one of the most important features of commercial paper, a contract for the payment of money. A negotiable instrument is a written document, signed by the maker or drawer that contains an unconditional promise to pay a certain sum of money on delivery or at a definite time to the bearer.
