when is an instrument payable on demand?

(d) A promise or order other TRANSFER OF INSTRUMENT; RIGHTS ACQUIRED BY TRANSFER. EXCUSED PRESENTMENT AND NOTICE OF DISHONOR. (b) Except as provided in Subsection (d) or (e), if demand for payment is made to the maker of a note payable on demand, an action to enforce the obligation of a party to pay the note must be commenced within six years after the demand. Negotiable Instrument: A negotiable instrument is a document that promises payment to a specified person or the assignee . (d) "Certified check" means a check accepted by the bank on which it is drawn. Sec. (2) in the case of acceptance, revoke the acceptance. BATASnatin LIVE! If the obligee is the person entitled to enforce the instrument but no longer has possession of it because it was lost, stolen, or destroyed, the obligation may not be enforced to the extent of the amount payable on the instrument, and to that extent the obligee's rights against the obligor are limited to enforcement of the instrument. Sec. Acceptance may be made as stated in Subsection (a) or by a writing on the check that indicates that the check is certified. 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. 1563), Sec. (17) "Secondary obligor," with respect to an instrument, means (A) an indorser or an accommodation party, (B) a drawer having the obligation described in Section 3.414(d), or (C) any other party to the instrument that has recourse against another party to the instrument pursuant to Section 3.116(b). (c) Subject to Subsection (e), to the extent of a payment under Subsections (a) and (b), the obligation of the party obliged to pay the instrument is discharged even though payment is made with knowledge of a claim to the instrument under Section 3.306 by another person. (c) If a drawee asserts a claim for breach of warranty under Subsection (a) based on an unauthorized indorsement of the draft or an alteration of the draft, the warrantor may defend by proving that the indorsement is effective under Section 3.404 or 3.405 or the drawer is precluded under Section 3.406 or 4.406 from asserting against the drawee the unauthorized indorsement or alteration. 3.414. 548), Sec. An instrument is also converted if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment. 921, Sec. (c) A payor bank or drawee paying a fraudulently altered instrument or a person taking it for value, in good faith and without notice of the alteration, may enforce rights with respect to the instrument: (1) according to its original terms; or. (c) Subject to Subsection (d), a claim is not discharged under Subsection (b) if either of the following applies: (1) The claimant, if an organization, proves that: (A) within a reasonable time before the tender, the claimant sent a conspicuous statement to the person against whom the claim is asserted that communications concerning disputed debts, including an instrument tendered as full satisfaction of a debt, are to be sent to a designated person, office, or place; and. (16) "Remotely-created item" means an item that is created by a third party, other than the payor bank, under the purported authority of the drawer of the item for the purpose of charging the drawer's account with a bank and that does not bear a handwritten signature purporting to be the signature of the drawer. 921, Sec. (d) Subject to Subsection (e), a transferee, or any party that has acquired rights in the instrument directly or indirectly from a transferee, including any such party that has rights as a holder in due course, is deemed to have notice of any payment that is made under Subsection (b) after the date that the note is transferred to the transferee but before the party obliged to pay the note receives adequate notification of the transfer. What constitutes holder for value. 921, Sec. The drawee of a check has no obligation to certify the check, and refusal to certify is not dishonor of the check. (c) An order that The principles stated in Section 3.110 apply to special indorsements. 95 (S.B. (2) that stated in Subsection (b) in any other case. INCOMPLETE INSTRUMENT. another bank, or (ii) payable at or through a bank. by the person promising or ordering payment to do any act in addition to the Added by Acts 1995, 74th Leg., ch. Sec. The protest must identify the instrument and certify either that presentment has been made or, if not made, the reason why it was not made, and that the instrument has been dishonored by nonacceptance or nonpayment. 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 Section 3.402(a). 346), Sec. (4) If the person entitled to enforce the instrument taken for an obligation is a person other than the obligee, the obligee may not enforce the obligation to the extent the obligation is suspended. (b) If an unaccepted draft is dishonored, the drawer is obliged to pay the draft (i) 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 (ii) if the drawer signed an incomplete instrument, according to its terms when completed, to the extent stated in Sections 3.115 and 3.407. (2) the instrument, whether or not indorsed, is deposited in a depositary bank to an account in a name substantially similar to that of the payee. 128 (S.B. in payment of principal. (a) Except as provided in subsections (c) and (d), " 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: (1) is payable to bearer or to order at the time it is issued or first comes into possession of a holder; (2) is payable on demand or at a definite time; and (a) Unless otherwise provided in this chapter or Chapter 4, 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. the day after the accelerated due date. Sept. 1, 1997; Acts 2003, 78th Leg., ch. Acts 2005, 79th Leg., Ch. Acts 2005, 79th Leg., Ch. September 1, 2007. This section is not intended to provide a holder or transferee indemnity from the seller with respect to the holder or transferee's direct liability to the issuer for the holder or transferee's own actionable misconduct unrelated to derivative liability under the statement. (13) "Prove" with respect to a fact means to meet the burden of establishing the fact (Section 1.201(b)(8)). 3.118. or (ii) does not state any time of payment. ENFORCEMENT OF LOST, DESTROYED, OR STOLEN INSTRUMENT. (2) by agreeing not to sue or otherwise renouncing rights against the party by a signed record. (6) with respect to a remotely-created item, that the person on whose account the item is drawn authorized the issuance of the item in the amount for which the item is drawn. OVERDUE INSTRUMENT. (c) Except as provided in Subsection (d), in an action to enforce the obligation of a party to pay the instrument, the obligor may not assert against the person entitled to enforce the instrument a defense, claim in recoupment, or claim to the instrument (Section 3.306) of another person, but the other person's claim to the instrument may be asserted by the obligor if the other person is joined in the action and personally asserts the claim against the person entitled to enforce the instrument. Sec. (4) requires, as a condition to payment, a countersignature by a person whose specimen signature appears on the instrument. -instrument payable on demand-drawn on a bank-designated as _____-requires countersignature by person whose signature appears on instrument. SPECIAL INDORSEMENT; BLANK INDORSEMENT; ANOMALOUS INDORSEMENT. If a delivery notification fee has been collected under this section and the holder subsequently receives a fee collected under Article 102.007(g), Code of Criminal Procedure, the holder shall immediately refund the fee previously collected from the drawer or indorser. check" means a draft drawn by a bank (i) on (2) If the note is not payable on demand and is payable at or through a bank or the terms of the note require presentment, the note is dishonored if presentment is duly made and the note is not paid on the day it becomes payable or the day of presentment, whichever is later. A former holder who reacquires the instrument may cancel indorsements made after the reacquirer first became a holder of the instrument. Sept. 1, 1997. (a) The following are admissible as evidence and create a presumption of dishonor and of any notice of dishonor stated: (1) a document regular in form as provided in Subsection (b) that purports to be a protest; (2) a purported stamp or writing of the drawee, payor bank, or presenting bank on or accompanying the instrument stating that acceptance or payment has been refused unless reasons for the refusal are stated and the reasons are not consistent with dishonor; (3) a book or record of the drawee, payor bank, or collecting bank that is kept in the usual course of business and that shows dishonor, even if there is no evidence of who made the entry. (2) If the principal is not payable in installments Acts 2007, 80th Leg., R.S., Ch. 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. (3) if the instrument is not a check, when the instrument has been outstanding for a period of time after its date that is unreasonably long under the circumstances of the particular case in light of the nature of the instrument and usage of the trade. IMPOSTORS; FICTITIOUS PAYEES. (a) Except as provided in Subsections (c) and (d), "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: (1) is payable to bearer or to order at the time it is issued or first comes into possession of a holder; (2) is payable on demand or at a definite time; and. Sec. An instrument is payable on demand where it is expressed to be payable on demand, on sight, or on presentation It is payable on demand also when no date of payment is specified It is payable on demand when the time of payment is left blank or unfilled INSTRUMENT ON DEMAND ONLY AS BETWEEN THE PARTIES trade acceptance. Free legal advice visit BATASnatin YouTube for more details! 95 (S.B. 1, eff. Sec. 3.505. Sec. (b) If the validity of signatures is admitted or proved and there is compliance with Subsection (a), a plaintiff producing the instrument is entitled to payment if the plaintiff proves entitlement to enforce the instrument under Section 3.301, unless the defendant proves a defense or claim in recoupment. 3.307. PERSON ENTITLED TO ENFORCE INSTRUMENT. 1563), Sec. and the due date has not been accelerated, the instrument becomes DATE OF INSTRUMENT. 131, Sec. (3) an action to enforce an obligation, duty, or right arising under this chapter and not governed by this section. (F) without notice that any party has a defense or claim in recoupment described in Section 3.305(a). (2) The person making payment may recover from any warrantor for breach of warranty an amount equal to the amount paid plus expenses and loss of interest resulting from the breach. DEFINITIONS. (3) does not state any other undertaking or instruction (a) A person entitled to enforce an instrument, with or without consideration, may discharge the obligation of a party to pay the instrument: (1) by an intentional voluntary act, such as surrender of the instrument to the party, destruction, mutilation, or cancellation of the instrument, cancellation or striking out of the party's signature, or the addition of words to the instrument indicating discharge; or. If a claim is asserted in compliance with this subsection, the following rules apply: (1) The claim becomes enforceable at the later of (i) the time the claim is asserted, or (ii) the 90th day following the date of the check, in the case of a cashier's check or teller's check, or the 90th day following the date of the acceptance, in the case of a certified check. Uniform Commercial Code 3-304. (d) If a claimant has the right to assert a claim under Subsection (b) and is also a person who is entitled to enforce a cashier's check, teller's check, or certified check that is lost, destroyed, or stolen, the claimant may assert rights with respect to the check under either this section or Section 3.309. 921, Sec. (3) Except as provided in Subdivision (4), if the check or note is dishonored and the obligee of the obligation for which the instrument was taken is the person entitled to enforce the instrument, the obligee may enforce either the instrument or the obligation. Nebraska Legislature GENERAL PROVISIONS AND DEFINITIONS. (c) Dishonor of an unaccepted documentary draft occurs according to the rules stated in Subsections (b)(2), (3), and (4), except that payment or acceptance may be delayed without dishonor until not later than the close of the third business day of the drawee following the day on which payment or acceptance is required by those subdivisions. (c) Repealed by Acts 2005, 79th Leg., Ch. OVERDUE INSTRUMENT. 3-110. identification of person to whom instrument is payable. (12) "Promise" means a written undertaking to pay money signed by the person undertaking to pay. 3.308. Delivery of a declaration of loss is a warranty of the truth of the statements made in the declaration. 3.304. Sec. Unless notice of a claim for breach of warranty is given to the warrantor within 30 days after the claimant has reason to know of the breach and the identity of the warrantor, the liability of the warrantor under Subsection (b) or (d) is discharged to the extent of any loss caused by the delay in giving notice of the claim. (2) the recourse of the secondary obligor continues as if the release or extension had not been granted. Set #2 (Ch.26) Flashcards | Quizlet (a) In this section: (1) "Check" means a cashier's check, teller's check, or certified check. (c) If an instrument, DISCHARGE OF SECONDARY OBLIGORS. (c) Except as provided in Subsection (d), an action to enforce the obligation of a party to an unaccepted draft to pay the draft must be commenced within three years after dishonor of the draft or 10 years after the date of the draft, whichever period expires first. If an instrument is payable to an account identified by number and by the name of a person, the instrument is payable to the named person, whether or not that person is the owner of the account identified by number. and an instrument so indorsed is payable to bearer, and may be negotiated by delivery. An accommodated party that pays the instrument has no right of recourse against, and is not entitled to contribution from, an accommodation party. (a) An indication of a particular fund out of which reimbursement is to be made, or a particular account to be debited with the amount; or (b) A statement of the transaction which gives rise to the instrument. An instrument is payable on demand: I. Sec. INSTRUMENT PAYABLE IN FOREIGN MONEY. Discharge of the obligation does not affect any liability that the obligor may have as an indorser of the instrument. a check, when the instrument has been outstanding for a 1563), Sec. Sec. (c) The warranties stated in Subsection (a) cannot be disclaimed with respect to checks. (c) If an instrument, payable at a fixed date, is also payable on demand made before the fixed date, the instrument is payable on demand until the fixed date and, if demand for payment is not made before that date, becomes payable at a definite time on the fixed date. It must be written on the draft and may consist of the drawee's signature alone. An instrument payable on demand -- that is, it is payable immediately after it is issued and thereafter for a reasonable period of time Issue (of an instrument) The first delivery of an instrument by the maker or drawer for the purpose of giving rights on the instrument to any person Time instrument An instrument payable at a future date Draft (b) Subject to Subsection (c), if an incomplete instrument is an instrument under Section 3.104, it may be enforced according to its terms if it is not completed, or according to its terms as augmented by completion. 4.01, eff. THE NEGOTIABLE INSTRUMENTS LAW Flashcards | Chegg.com INSTRUMENTS SIGNED FOR ACCOMMODATION. (g) This section is subject to any law limiting status as a holder in due course in particular classes of transactions. (C) without notice that the instrument is overdue or has been dishonored or that there is an uncured default with respect to payment of another instrument issued as part of the same series; (D) without notice that the instrument contains an unauthorized signature or has been altered; (E) without notice of any claim to the instrument described in Section 3.306; and. (d) If a draft is accepted by a bank after an indorsement is made, the liability of the indorser under Subsection (a) is discharged. 95 (S.B. An order to pay money drawn on a bank and payable on demand is a: check. (a) 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. (c) If a draft is accepted by a bank, the drawer is discharged, regardless of when or by whom acceptance was obtained. 2, eff. Statement 2. Acts 2007, 80th Leg., R.S., Ch. Section 3-106 (a) of the UCC provides that an instrument is not negotiable if 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. (C) deposited to an account other than an account of the fiduciary, as such, or an account of the represented person; (3) if an instrument is issued by the represented person or the fiduciary as such, and made payable to the fiduciary personally, the taker does not have notice of the breach of fiduciary duty unless the taker knows of the breach of fiduciary duty; and. (e) If as to a particular item (1) a transferee (including a collecting bank) asserts a claim for breach of the warranty in Subsection (a)(6), but (2) under applicable law (including the applicable choice-of-law principles) that transferee would not make a warranty substantially similar to the warranty in Subsection (a)(6) if such transferee were a transferor, then that transferee would not receive the warranty in Subsection (a)(6) from any transferor. (b) Dishonor of an unaccepted draft other than a documentary draft is governed by the following rules: (1) If a check is duly presented for payment to the payor bank otherwise than for immediate payment over the counter, the check is dishonored if the payor bank makes timely return of the check or sends timely notice of dishonor or nonpayment under Section 4.301 or 4.302, or becomes accountable for the amount of the check under Section 4.302. 1541), Sec. (c) Unless the due date of (a) Except as otherwise provided in this section, the right to enforce the obligation of a party to pay an instrument is subject to the following: (A) infancy of the obligor to the extent it is a defense to a simple contract; (B) duress, lack of legal capacity, or illegality of the transaction that, under other law, nullifies the obligation of the obligor; (C) fraud that induced the obligor to sign the instrument with neither knowledge nor reasonable opportunity to learn of its character or its essential terms; or. (d) If (i) a dishonored draft is presented for payment to the drawer or an indorser, or (ii) any other instrument is presented for payment to a party obliged to pay the instrument, and (iii) payment is received, the following rules apply: (1) The person obtaining payment and a prior transferor of the instrument warrant to the person making payment in good faith that the warrantor is, or was, at the time the warrantor transferred the instrument, a person entitled to enforce the instrument or authorized to obtain payment on behalf of a person entitled to enforce the instrument. (c) Expenses or consequential damages under Subsection (b) are not recoverable if the refusal of the obligated bank to pay occurs because: (1) the obligated bank suspends payments; (2) the obligated bank asserts a claim or defense of the bank that it has reasonable grounds to believe is available against the person entitled to enforce the instrument; (3) the obligated bank has a reasonable doubt whether the person demanding payment is the person entitled to enforce the instrument; or. If an instrument falls within the 4, eff. "Responsibility" does not include authority that merely allows an employee to have access to instruments or blank or incomplete instrument forms that are being stored or transported or are part of incoming or outgoing mail, or similar access. (f) A secondary obligor is not discharged under this section if the secondary obligor consents to the event or conduct that is the basis of the discharge, or the instrument or a separate agreement of the party provides for waiver of discharge under this section specifically or by general language indicating that parties waive defenses based on suretyship or impairment of collateral. effect that the promise or order is not negotiable or is not an instrument governed (c) Except to the extent a transferor or predecessor in interest has rights as a holder in due course, a person does not acquire rights of a holder in due course of an instrument taken: (1) by legal process or by purchase in an execution, bankruptcy, or creditor's sale or similar proceeding; (2) by purchase as part of a bulk transaction not in ordinary course of business of the transferor; or. (a) If an instrument is issued for value given for the benefit of a party to the instrument ("accommodated party") and another party to the instrument ("accommodation party") signs the instrument for the purpose of incurring liability on the instrument without being a direct beneficiary of the value given for the instrument, the instrument is signed by the accommodation party "for accommodation.". (D) the declarer cannot reasonably obtain possession of the check because the check was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process. Sec. (e) In a consumer transaction, if law other than this chapter requires that an instrument include a statement to the effect that the rights of a holder or transferee are subject to a claim or defense that the issuer could assert against the original payee, and the instrument does not include such a statement: (1) the instrument has the same effect as if the instrument included such a statement; (2) the issuer may assert against the holder or transferee all claims and defenses that would have been available if the instrument included such a statement; and. check. 131, Sec. Amended by Acts 1995, 74th Leg., ch. BLAW 333 T/F Flashcards | Quizlet (e) If the signature of a party to an instrument is accompanied by words indicating that the party guarantees payment or the signer signs the instrument as an accommodation party in some other manner that does not unambiguously indicate an intention to guarantee collection rather than payment, the signer is obliged to pay the amount due on the instrument to a person entitled to enforce the instrument in the same circumstances as the accommodated party would be obliged, without prior resort to the accommodated party by the person entitled to enforce the instrument.
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