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Negotiable Instruments Law
Source: Encyclopedia of Banking & Finance (9h Edition) by Charles J Woelfel
(We recommend this as work of authority.)

Article 3 Commercial Paper

Part I
Short Title, Form and Interpretation

  Section 3-101, Short Title.

This Article shall be known and may be cited as Uniform Commercial Code - Commercial Paper.

 Section 3-102.  Definitions and Index of Definitions.

(1)  In this Article 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 identify the person to pay with reasonable certainty.  It may be addressed to one or more such persons jointly or in the alternative but not in succession.

(c)  A "promise" is an undertaking to pay and must be more than an acknowledgment of an obligation.

(d)  "Secondary party" means a drawer or endorser.

(e)  "Instrument" means a negotiable instrument.

(2)  Other definitions applying to this Article and the sections in which they appear are:

      "Acceptance," Section 3-410. 
"Accommodation party."  Section 3-415. 

"Alteration."  Sections 3-407. 
"Certificate of deposit."  Section 3-104. 
"Certification."  Section 3-411. 
"Check."  Section 3-104. 
"Definite time."  Section 3-109. 
"Dishonor."  Section 3-507. 
"Draft."  Section 3-104. 
"Holder in due course."  Section 3-302. 
"Negotiation."  Section 3-202. 
"Note."  Section 3-104. 

"Notice of dishonor."  Section 3-508. 

"On demand."  Section 3-108. 
"Presentment."  Section 3-504. 
"Protest."  Section 3-509. 
"Restrictive Endorsement."  Section 3-205. 
"Signature."  Section 3-401.

(3)  The following definitions in order Articles apply to this Article:

      "Account."  Section 4-104. 
"Banking day."  Section 4-104. 
"Clearing house."  Section 4-104. 
"Collecting bank."  Section 4-105. 
"Customer."  Section 4-104. 
"Depositary bank."  Section 4-105. 
"Documentary draft."  Section 4-104. 
"Intermediary bank."  Section 4-105. 

"Item."  Section 4-104. 

Midnight deadline."  Section 40104. 
"Payor bank."  Section 4-105.

(4)  In addition Article I contains general definitions and principles of construction and   interpretation applicable throughout this Article.

 Section 3-103.  Limitations on Scope of Article.

(1)  This Article does not apply to money, documents of title, or investment securities.

(2) The provisions of this Article are subject to the provisions of the Article on Bank Deposits and   Collections (Article 4) and Secured Transactions (Article 9).

 Section 3-104.  Form of Negotiable Instruments; "Draft"; "Check"; "Certificate of Deposit"; "Note".

(1)  Any writing to be a negotiable instrument within this Article must:

(a)     be signed by the maker of drawer; and

(b)     contain an unconditional promise or order to pay a sum certain in money and no other promise, order, obligation or power given by the maker or drawer except as authorized by this Article; and

(c)     be payable on demand or at a definite time; and

(d)     be payable to order or to bearer.

(2)  A writing which complies with the requirements of this section is:

(a)     a "draft" ("bill of exchange") if it is an order;

(b)     a "check" if it is a draft drawn on a bank and payable on demand;

(c)     a "certificate of deposit" if it is an acknowledgment by a bank of receipt of money with an engagement to repay it;

(d)     a "note" if it is promise other than a certificate of deposit.

(3)  As used in other Articles of this Act, and as the context may require, the terms "draft," "check," "certificate of deposit," and "note" may refer to instruments which are not negotiable within this Article as well as to instruments which are so negotiable.

 Section 3-105.  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 which gave rise to the instrument, or that the promise or order is made or the instrument matures in accordance with or "as per" such transaction; or

(c)  refers to or states that it arises out of a separate agreement or refers to a separate agreement for rights as to prepayment or acceleration; or

(d) states that it is drawn under a letter of credit; or

(e) states that it is secured, whether by mortgage, reservation of title or otherwise; or

(f)   indicates a particular account to be debited or any other fund or source from which reimbursement is expected; or

(g) is limited to payment out of a particular fund or the proceeds of a particular source, if the instrument is issued by a government or governmental agency or unit; or

(h)  is limited to payment out of the entire assets of a partnership, unincorporated association, trust or estate by or on behalf of which the instrument is issued.

(2)  A promise or order is not unconditional if the instrument:

(a) states that it is subject to or governed by any other agreement; or

(b) states that it is to be paid only out of a particular fund or source except as provided in this section.

 Continue to Section 3-106.  Sum Certain.  

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