Article 3 — Negotiable Instruments · Section 3-104
An in-depth exploration of UCC § 3-104 regarding the definition and requirements of negotiable instruments.
Source: U.C.C. § 3-104
In order to qualify as a negotiable instrument, an instrument must be in writing and signed by the maker or drawer. It should contain an unconditional promise or order to pay a fixed amount of money, either on demand or at a definite time, and must be payable to order or bearer.
UCC § 3-104 defines what makes an instrument negotiable. Essentially, it requires that the instrument be written, signed, and include a clear promise to pay a set amount of money, either immediately or at a future date.
A written document guaranteeing the payment of a specific amount of money either on demand, or at a set time.
The person who writes and signs a note promising to pay.
The person who creates a draft or check instructing a bank to pay money.
Example 1
A check that is signed and specifies the amount and the recipient qualifies as a negotiable instrument.
Example 2
A promissory note that promises to pay a specific amount by a certain date meets the criteria set forth in UCC § 3-104.