This section names the division of the law that deals with negotiable instruments as the Uniform Commercial Code—Negotiable Instruments.

This section of the law talks about the rules that apply to negotiable instruments, which are financial documents like checks and promissory notes. It makes clear that these rules don't cover actual cash, certain electronic payment systems, or securities like stocks and bonds. If there's a disagreement between these rules and other specific banking regulations, those other banking rules take precedence. Also, rules from the Federal Reserve can override these if there's a conflict.

This section defines various terms used in commercial transactions involving drafts and notes. Key definitions include 'acceptor' as the drawee who accepts a draft, 'drawee' as the person told to make payment in a draft, and 'drawer' as the person ordering payment. 'Maker' is the person who agrees to pay a note. It also explains 'order' as a written instruction to pay money and sets out what 'ordinary care' means in business and banking. Definitions like 'promise,' 'party,' and 'remitter' refer to obligations to pay money or parties involved in transactions. Additional terms are referenced in related sections, such as 'acceptance,' 'alteration,' and 'negotiable instrument.' Finally, it mentions cross-references to other divisions for more definitions and principles.

This law section defines what qualifies as a 'negotiable instrument,' which is essentially a written promise or order to pay a fixed amount of money. For something to be considered a negotiable instrument, it must meet certain requirements: it should be payable to the bearer or a specific person, payable on demand or at a set time, and must not have conditions other than the payment itself, though it can involve collateral matters. Different types of negotiable instruments include checks, drafts (orders to pay), notes (promises to pay), cashier's checks, teller's checks, traveler's checks, certificates of deposit, and demand drafts. Each type has specific definitions and requirements. Also, if a promise or order is clearly marked as non-negotiable, it does not count as an instrument under this law section.

This law section explains how financial instruments, such as checks or promissory notes, are 'issued' and what that means. It specifies that issue involves the first delivery or, with agreement, the first transmission of a check image to give rights to the receiver. Even if a check hasn't been delivered, it's still binding on the person who wrote it, unless it wasn't meant to be issued. If it's issued conditionally or for a specific purpose, failure to meet those conditions can be used as a defense. The term 'issuer' refers to the creator of any such instrument, whether it's actually been issued or not.

This law explains when a promise or order to pay someone is considered unconditional. It outlines that such a promise is typically unconditional unless it explicitly states a condition for payment, refers to another document that governs it, or indicates that rights or obligations are detailed elsewhere. However, simply mentioning another document doesn’t make it conditional. Additionally, even if a document requires a signature or links payments to a specific source, it might still be considered unconditional. If there are certain legal statements indicating that a payment is subject to claims or defenses, this doesn’t necessarily change its status unless it's an instrument, in which case certain holder rights might be affected.

If a financial document specifies a payment amount in foreign currency, the payment can be made in that foreign currency or its equivalent in US dollars. The dollar amount is calculated based on the current exchange rate on the day of payment at the location where the payment is made.

This section defines when a financial promise or order is payable 'on demand' or 'at a definite time.' A promise or order is 'payable on demand' if it explicitly states so or doesn't specify a payment time. It's 'payable at a definite time' if it’s due after a specific period, date, or event, with options for early payment, speeding up the timeline, extensions by the holder, or other definable circumstances. If it's due on a fixed date but also on demand, it stays payable on demand until that date, then shifts to being due at that fixed time if no previous demand is made.

This law explains when a financial document, like a check or promissory note, is considered 'payable to bearer' or 'payable to order.' 'Payable to bearer' means whoever holds the document can collect the money, and it's generally considered bearer paper if it doesn't specify a person to pay. 'Payable to order' means it's addressed to a specific person. A bearer document can be changed to specify a person with a special endorsement, while a named document can become bearer with a blank endorsement.

This section explains how to determine who is entitled to receive payment from a financial instrument like a check. The key factor is the intention of the person who signed the instrument, even if the name on the document isn't exactly who they intended. If more than one person signs and they have different intentions, any intended recipient can be paid. When an instrument is generated by an automated machine, the intention of the person inputting the payee's identity matters. Payees can be identified by various means, such as name or account number. For instruments payable to multiple parties, if payable alternatively, anyone can act on it; if not, everyone must agree. If it's unclear whether it’s alternative, it can be treated as if it is. Special rules apply for trustees, representatives, agents, or funds, specifying who can claim the instrument.

This law explains where a payment should be made for financial instruments like checks or promissory notes. Typically, payment is due at the location specified in the document. If no location is listed, it defaults to the address of the person or business who is supposed to pay, called the drawee or maker. When there isn't an address in the document, payment should be made at any business location of the payer. If the payer doesn't have a business location, their home is the place of payment.

This law talks about how interest on financial instruments works. Generally, unless a document called an 'instrument' says otherwise, it's not payable with interest. If it is, the interest starts from the date on the document. Interest can be set at a fixed rate or variable rate and might be detailed in different ways within the instrument. If you can't figure out how much interest to pay from the document itself, then the interest is calculated based on the local court's standard interest rate at the time it starts.

This section says that a financial document, like a check, can have a date before or after the current date. If it’s set to be paid at a certain time after the date on it, that date controls when it should be paid. However, if someone can request to be paid whenever they want, the payment can’t happen before the date on the document. If the document doesn’t have a date, use the date it was actually issued, or if it wasn’t issued, use the date when someone first holds it.

This law explains how to resolve conflicts in written agreements. If there are contradictory parts, handwritten notes are more important than typewritten or printed ones, and words take precedence over numbers.

This section explains what an 'incomplete instrument' is and how it can be enforced. An incomplete instrument is a signed document that's missing some parts but is intended to be filled in later. If it's a qualifying document, it can be enforced as it is or once completed. If an incomplete instrument is not initially valid but becomes valid after completion, it can then be enforced accordingly. However, if someone adds words or numbers to it without permission, it's considered altered, and the person claiming such unauthorized changes must prove it.

This law covers situations where multiple people have jointly issued a financial instrument, like a loan or check. Each person is separately responsible for the full amount, but if one person pays it off, they can ask the others to chip in their share. Letting one person off the hook for a debt doesn't mean others who signed can't ask that person for their part of the payment later on.

This law explains that the duties to pay on a financial instrument, like a promissory note, can be changed or canceled by a separate agreement between the person who owes money (obligor) and the person who can enforce payment. The changes can only happen if the agreement was part of the original deal or relied upon when the instrument was issued. If such an agreement changes the obligation, it can serve as a defense for not fulfilling the original payment terms.

This law explains the time limits for suing someone to enforce a payment obligation on different types of financial instruments like promissory notes and checks. If you have a note with a set payday, you must sue within six years after the due date. For demand notes, you have six years after asking for payment. For unaccepted drafts, you have three years after non-payment, or 10 years from its date, whichever comes first. For checks like cashier’s and traveler’s checks, you have three years after requesting payment. Certificates of deposit follow the same six-year rule after demand, provided a due date is also past. Finally, for accepted drafts, it's six years after the due date or acceptance date depending on the payment terms. Actions involving conversion, breach of warranty, or related obligations must be brought within three years of the issue arising.

This law allows a defendant involved in a legal dispute to notify a third party who might also be responsible for the issue. The third party can then notify others who are similarly responsible. The notice must inform the third party that they can join the defense; if they don't, they must accept the outcomes of the current case if those issues come up again in future legal actions with the person who sent the notice. If the third party doesn't participate after receiving proper notice, they're stuck with the court's decisions regarding facts found during the case.