Article 3 — Negotiable Instruments · Section 3-102
A comprehensive overview of UCC § 3-102 regarding the creation and applicability of negotiable instruments under the Uniform Commercial Code.
Source: U.C.C. § 3-102
Negotiable instruments that can be enforced under this Article include unconditional promises or orders to pay a fixed amount of money, which are payable on demand or at a definite time, and are payable to order or to bearer.
UCC § 3-102 defines what qualifies as a negotiable instrument that can be enforced under Article 3. It outlines the necessary elements such as being an unconditional promise to pay a specific sum, and being payable either on demand or at a set time.
A signed document that promises a sum of money to be paid either on demand or at a specified time.
An unconditional commitment to provide payment of a specified amount.
A financial instrument that must be paid whenever the holder requests payment.
An instrument that specifies a particular payee who is entitled to receive the payment.
An instrument that is payable to whoever holds the instrument.
Example 1
A check made out to 'John Doe' that states 'Pay to the order of John Doe' is a negotiable instrument.
Example 2
A promissory note that states 'I promise to pay $500 on or before June 1, 2025' is considered a negotiable instrument.
Example 3
A cash ticket for a lottery win that can be redeemed for a specific sum of money.