Article 3 — Negotiable Instruments · Section 3-309
An overview of UCC § 3-309, which deals with lost, stolen, or destroyed negotiable instruments and the rights of claimants.
Source: U.C.C. § 3-309
A person who seeks to enforce a lost, stolen, or destroyed instrument must establish the right to enforce the instrument. The court may order the payment of the instrument to be made to a claimant if certain conditions are met.
UCC § 3-309 states that if a negotiable instrument is lost, stolen, or destroyed, the holder can still enforce the instrument if they prove their right to do so. The court can require payment of the instrument to the holder, subject to certain conditions.
To transfer possession of a negotiable instrument in a manner that facilitates the instrument's transferability.
A type of negotiable instrument where possession is sufficient for enforcing the payment.
Example 1
A holder of a lost promissory note files a claim in court and can demonstrate their ownership despite its loss, allowing them to recover the amount due.
Example 2
If a bank accepts a lost check for payment, it might have to honor the claim of the original payee who asserts rights over the check.