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Information > Financial Terms > This page Negotiable Instruments Law Article 3 Commercial PaperPart
I
Short
Title, Form and Interpretation
This
Article shall be known and may be cited as Uniform Commercial Code - Commercial
Paper. (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. (3)
The following definitions in order Articles apply to this Article: "Account."
Section 4-104. (4)
In addition Article I contains general definitions and principles
of construction and interpretation applicable
throughout this 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). (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. (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. |