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(810 ILCS 5/Art.
3 Pt. 1 heading)
PART
1. GENERAL PROVISIONS AND DEFINITIONS
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(810 ILCS 5/3-101) (from Ch. 26,
par. 3-101)
Sec. 3-101. Short title.
This Article may be cited as Uniform Commercial Code-Negotiable
Instruments.
(Source: P.A. 87-582.)
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(810 ILCS 5/3-102) (from Ch. 26,
par. 3-102)
Sec. 3-102. Subject matter.
(a) This Article applies to negotiable
instruments. It does not apply to money, to payment orders
governed by Article 4A, or to securities governed by Article
8.
(b) If there is conflict between
this Article and Article 4 or 9, Articles 4 and 9 govern.
(c) Regulations of the Board of
Governors of the Federal Reserve System and operating circulars
of the Federal Reserve Banks supersede any inconsistent provision
of this Article to the extent of the inconsistency.
(Source: P.A. 87-582; 87-1135.)
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(810 ILCS 5/3-103) (from Ch. 26,
par. 3-103)
Sec. 3-103. Definitions.
(a) In this Article:
(1) "Acceptor" means
a drawee that has accepted a
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(2) "Drawee" means
a person ordered in a draft to
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(3) "Drawer" means
a person who signs or is
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identified in a draft as a person ordering
payment.
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(4) "Good
faith" means honesty in fact and the
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observance of reasonable commercial
standards of fair dealing.
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(5) "Maker" means
a person who signs or is
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identified in a note as a person undertaking
to pay.
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(6) "Order" means
a written instruction to pay money
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signed by the person giving the instruction.
The instruction may be addressed to any person,
including the person giving the instruction, or
to one or more persons jointly or in the alternative
but not in succession. An authorization to pay
is not an order unless the person authorized to
pay is also instructed to pay.
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(7) "Ordinary
care" in the case of a person engaged
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in business means observance of reasonable
commercial standards, prevailing in the area in
which the person is located with respect to the
business in which the person is engaged. In the
case of a bank that takes an instrument for processing
for collection or payment by automated means, reasonable
commercial standards do not require the bank to
examine the instrument if the failure to examine
does not violate the bank's prescribed procedures
and the bank's procedures do not vary unreasonably
from general banking usage not disapproved by this
Article or Article 4.
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(8) "Party" means
a party to an instrument.
(9) "Promise" means
a written undertaking to pay
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money signed by the person undertaking
to pay. An acknowledgment of an obligation by the
obligor is not a promise unless the obligor also
undertakes to pay the obligation.
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(10) "Prove" with
respect to a fact means to meet
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the burden of establishing the fact
(Section 1-201(8)).
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(11) "Remitter" means
a person that purchases an
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instrument from its issuer if the instrument
is payable to an identified person other than the
purchaser.
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(b) Other definitions
applying to this Article and the Sections in which they
appear are:
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"Acceptance"
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Section
3-409
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"Accommodated
party"
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Section
3-419
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"Accommodation
party"
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Section
3-419
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"Alteration"
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Section
3-407
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"Anomalous
indorsement"
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Section
3-205
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"Blank
indorsement"
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Section
3-205
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"Cashier's
check"
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Section
3-104
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"Certificate
of deposit"
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Section
3-104
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"Certified
check"
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Section
3-409
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"Check"
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Section
3-104
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"Consideration"
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Section
3-303
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"Draft"
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Section
3-104
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"Holder
in due course"
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Section
3-302
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"Incomplete
instrument"
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Section
3-115
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"Indorsement"
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Section
3-204
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"Indorser"
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Section
3-204
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"Instrument"
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Section
3-104
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"Issue"
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Section
3-105
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"Issuer"
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Section
3-105
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"Negotiable
instrument"
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Section
3-104
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"Negotiation"
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Section
3-201
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"Note"
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Section
3-104
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"Payable
at a definite time"
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Section
3-108
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"Payable
on demand"
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Section
3-108
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"Payable
to bearer"
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Section
3-109
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"Payable
to order"
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Section
3-109
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"Payment"
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Section
3-602
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"Person
entitled to enforce"
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Section
3-301
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"Presentment"
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Section
3-501
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"Reacquisition"
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Section
3-207
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"Special
indorsement"
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Section
3-205
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"Teller's
check"
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Section
3-104
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"Transfer
of instrument"
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Section
3-203
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"Traveler's
check"
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Section
3-104
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"Value"
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Section
3-303
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(c) The following
definitions in other Articles apply to this Article:
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"Bank"
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Section
4-105
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"Banking
day"
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Section
4-104
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"Clearing
house"
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Section
4-104
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"Collecting
bank"
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Section
4-105
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"Depositary
bank"
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Section
4-105
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"Documentary
draft"
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Section
4-104
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"Intermediary
bank"
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Section
4-105
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"Item"
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Section
4-104
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"Payor
bank"
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Section
4-105
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"Suspends
payments"
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Section
4-104.
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(d) In addition,
Article 1 contains general definitions and principles
of construction and interpretation applicable throughout
this Article.
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(Source: P.A. 87-582; 87-1135.)
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(810 ILCS 5/3-104) (from Ch. 26,
par. 3-104)
Sec. 3-104. Negotiable instrument.
(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
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is issued or first comes into possession
of a holder;
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(2)
is payable on demand or at a definite time; and
(3) does
not state any other undertaking or
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instruction by the person promising
or ordering payment to do any act in addition to
the payment of money, but the promise or order
may contain (i) an undertaking or power to give,
maintain, or protect collateral to secure payment,
(ii) an authorization or power to the holder to
confess judgment or realize on or dispose of collateral,
or (iii) a waiver of the benefit of any law intended
for the advantage or protection of any obligor.
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(b) "Instrument" means
a negotiable instrument.
(c) An order that meets all of
the requirements of subsection (a), except paragraph (1), and
otherwise falls within the definition of "check" in
subsection (f) is a negotiable instrument and a check.
(d) A promise or order other than
a check is not an instrument if, at the time it is issued or first
comes into possession of a holder, it contains a conspicuous statement,
however expressed, to the effect that the promise or order is not
negotiable or is not an instrument governed by this Article.
(e) An instrument is a "note" if
it is a promise and is a "draft" if it is an order. If
an instrument falls within the definition of both "note" and "draft",
a person entitled to enforce the instrument may treat it as either.
(f) "Check" means (i)
a draft, other than a documentary draft, payable on demand and
drawn on a bank or (ii) a cashier's check or teller's check. An
instrument may be a check even though it is described on its face
by another term, such as "money order".
(g) "Cashier's check" means
a draft with respect to which the drawer and drawee are the same
bank or branches of the same bank.
(h) "Teller's check" means
a draft drawn by a bank (i) on another bank, or (ii) payable at
or through a bank.
(i) "Traveler's check" means
an instrument that (i) is payable on demand, (ii) is drawn on or
payable at or through a bank, (iii) is designated by the term "traveler's
check" or by a substantially similar term, and (iv) requires,
as a condition to payment, a countersignature by a person whose
specimen signature appears on the instrument.
(j) "Certificate of deposit" means
an instrument containing an acknowledgment by a bank that a sum
of money has been received by the bank and a promise by the bank
to repay the sum of money. A certificate of deposit is a note of
the bank.
(Source: P.A. 87-582; 87-1135.)
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(810 ILCS 5/3-105) (from Ch. 26,
par. 3-105)
Sec. 3-105. Issue of instrument.
(a) "Issue" means the
first delivery of an instrument by the maker or drawer, whether
to a holder or nonholder, for the purpose of giving rights on
the instrument to any person.
(b) An unissued instrument, or
an unissued incomplete instrument that is completed, is binding
on the maker or drawer, but nonissuance is a defense. An instrument
that is conditionally issued or is issued for a special purpose
is binding on the maker or drawer, but failure of the condition
or special purpose to be fulfilled is a defense.
(c) "Issuer" applies
to issued and unissued instruments and means a maker or drawer
of an instrument.
(Source: P.A. 87-582; 87-1135.)
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(810 ILCS 5/3-106) (from Ch. 26,
par. 3-106)
Sec. 3-106. Unconditional
promise or order.
(a) Except as provided in this
Section, for the purposes of Section 3-104(a), a promise
or order is unconditional unless 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.
A reference to another writing does not of itself make the promise
or order conditional.
(b) A promise or order is not made
conditional (i) by a reference to another writing for a statement
of rights with respect to collateral, prepayment, or acceleration,
or (ii) because payment is limited to resort to a particular
fund or source.
(c) If a promise or order requires,
as a condition to payment, a countersignature by a person whose
specimen signature appears on the promise or order, the condition
does not make the promise or order conditional for the purposes
of Section 3-104(a). If the person whose specimen signature
appears on an instrument fails to countersign the instrument,
the failure to countersign is a defense to the obligation of
the issuer, but the failure does not prevent a transferee of
the instrument from becoming a holder of the instrument.
(d) If a promise or order at the
time it is issued or first comes into possession of a holder
contains a statement, required by applicable statutory or administrative
law, to the effect that the rights of a holder or transferee
are subject to claims or defenses that the issuer could assert
against the original payee, the promise or order is not thereby
made conditional for the purposes of Section 3-104(a);
but if the promise or order is an instrument, there cannot be
a holder in due course of the instrument.
(Source: P.A. 87-582; 87-1135.)
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(810 ILCS 5/3-107) (from Ch. 26,
par. 3-107)
Sec. 3-107. Instrument payable
in foreign money. Unless the instrument otherwise provides,
an instrument that states the amount payable in foreign money
may be paid in the foreign money or in an equivalent amount
in dollars calculated by using the current bank-offered
spot rate at the place of payment for the purchase of dollars
on the day on which the instrument is paid.
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