Article 3 — Negotiable Instruments · Section 3-401
Explore the primary elements concerning the creation and execution of negotiable instruments under UCC § 3-401.
Source: U.C.C. § 3-401
A person is not liable on an instrument unless the person signed the instrument. The signature of an unauthorized person is ineffective except as provided in Section 3-403.
This section establishes that only individuals who have signed a negotiable instrument can be held liable on it. If a person does not authorize their signature, they may not be held accountable, unless specific provisions apply.
A written document that promises to pay a specific amount of money to a specified person or bearer under certain conditions.
Any name, mark, or designation that is executed or adopted by an individual to authenticate a writing.
Example 1
A check signed by an individual is enforceable against them as long as it was their signature that appeared on the check.
Example 2
If a bank processes a check that has been forged, the bank cannot hold the person from whom the check was stolen liable due to the lack of a valid signature.