Article 3 — Negotiable Instruments · Section 3-301
Explore the definition and scope of parties entitled to enforce negotiable instruments under Article 3 of the UCC.
Source: U.C.C. § 3-301
§ 3-301. Person Entitled to Enforce Instrument. "Person entitled to enforce" an instrument means: (i) the holder of the instrument; (ii) a non-holder in possession of the instrument who has the rights of a holder; or (iii) a person not in possession who is entitled to enforce the instrument pursuant to § 3-309 or § 3-418(d).
UCC § 3-301 identifies who has the legal right to enforce or collect on a negotiable instrument. This includes the holder who possesses the instrument, a non-holder with the rights of a holder, and individuals entitled to enforce the instrument without possession under specific provisions.
A person in possession of a negotiable instrument that is payable either to them or to their order.
A person who possesses an instrument but is not the original payee or bearer.
Legal rights granted to a party to demand payment or performance under a negotiable instrument.
Example 1
A bank that holds a promissory note and is entitled to receive the payments specified is considered a holder.
Example 2
If a person has an endorsed check in their possession, they have the rights of the holder to cash or deposit the check.