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Copyright 2017, Matthew Bender & Company, Inc., a member of the LexisNexis Group.



The Negotiable Instrument


Matthew Bender Editorial Staff

Chapter Summary


This chapter of Commercial Law and Practice Guide (Matthew Bender) examines the negotiability rules contained in both the pre-1990 and 1990 versions of Article 3 of the U.C.C.

The chapter defines the basic terminology contained in the pre-1990 version of Article 3. It also examines the pre-1990 Article 3's negotiability rules, including those requiring that a negotiable instrument be in writing, be signed by the maker or drawer, contain an unconditional promise or order to pay money, be for a sum certain, be payable in money, be payable on demand or at a definite time, and be payable to order or to bearer. Further, it discusses the pre-1990 rules that deal with the construction of ambiguous terms in a negotiable instrument.

In addition, the chapter defines relevant terms contained in the new version of Article 3. It next discusses the negotiability rules under the new Article 3, which require a negotiable instrument to be in writing, be signed, contain an unconditional promise or order to pay, state a fixed amount to be paid, be payable in money, be payable either on demand or at a definite time, be payable either to bearer or to order at the time it is used or first comes into possession of a holder, and contain no other undertaking or instruction except as specifically permitted by Article 3. Then, the chapter examines the new Article 3's miscellaneous rules of construction as to the place of payment, the payment of interest, the date of the instrument, and contradictory terms.

Commercial Law and Practice Guide (Matthew Bender) provides article-by-article analysis of the Uniform Commercial Code, as well as strategies for applying the Code in specific transactions. It contains a unique combination of in-depth substantive analysis and practical guidance for handling commercial transactions, including sales transactions, leasing transactions, negotiable instrument transactions, letters of credit, and secured transactions.


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For coverage of the rights and liabilities of parties to negotiable instruments, see Chapter 14.

For discussion of negotiation and holders in due course, see Chapter 15.

For treatment of the allocation of loss for forgery and alteration, see Chapter 16.


For exhaustive coverage of the law of checks and negotiable instruments, including signature requirements, transfer and negotiation, holders in due course, liabilities and defenses, overdrafts, Regulation CC, and U.C.C. Articles 3 and 4, see Checks, Drafts and Notes (Matthew Bender).

For in-depth analysis of U.C.C. Articles 3, 4, and 4A and the case law interpreting these articles, along with coverage of the Federal Electronic Fund Transfer Act and the Expedited Funds Availability Act, see Negotiable Instruments under the Uniform Commercial Code (Matthew Bender).

For comprehensive analysis on the regulation, organization, operation, examination, and liquidation of commercial banks, including coverage of the FDIC and the Federal Reserve System; branching and mergers; checks, drafts, and notes; and the bank collection process, see Banking Law (Matthew Bender).
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