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  • About
    • Membership
    • News
    • Boards and Committees
    • Alice Dittman Trailblazer Award
    • NBA Foundation
    • Leadership Program
    • Staff Directory >
      • Contact Us
  • Workforce
    • Careers
    • Post Job Openings
  • Advocacy
    • Legislative Update
    • BankPAC
    • Comment Letters
  • Compliance
    • Handbook
    • Compliance Update
    • Compliance Alliance
  • Education
    • Event Calendar
    • In-person Events/Training
    • Webinars
    • ABA Training
    • Banking Schools
    • CYBERSECURITY TRAINING
    • Sponsorships and Exhibits
    • Young Bankers (YBON)
  • Insurance
    • Agency Services >
      • Commercial Insurance
      • Personal Insurance
      • Livestock, Irrigation and Farm Insurance
      • Surety Bonds
    • Bank Property & Liability
    • Financial Institution Insurance
    • Benefit Plans
  • Bank Resources
    • Preferred Vendors
    • Associate Members
    • Marketing Resources
    • Financial Literacy
    • Single Bank Pooled ​Collateral Program
    • Bank Security
    • Compensation & Benefits Survey

UCC ARTICLES 3 AND 4 NEGOTIABLE INSTRUMENTS: CONTRADICTORY TERMS, UNDATED OR INCOMPLETE CHECKS

I.         CONTRADICTORY TERMS

If an instrument contains contradictory terms, the rule is that typewritten terms prevail over printed terms, handwritten terms prevail over both, and words prevail over numbers [See, U.C.C. § 3-114].

II.        UNDATED

When a check is undated, it is considered dated at the time it first comes into possession of a holder [See, U.C.C. § 3-113].

III.       INCOMPLETE

An “incomplete instrument” means a signed writing, whether or not issued by the signer, the contents of which show at the time of signing that it is incomplete but that the signer intended it to be completed by the addition of words or numbers [See, U.C.C. § 3-115(a)].

Except in the case of words or numbers added to an incomplete instrument without the signer’s authorization, if an incomplete instrument is a negotiable instrument, it may be enforced according to its terms if it is not completed, or according to its terms as augmented by completion.  If an incomplete instrument is not a negotiable instrument, but, after completion, the requirements of being a negotiable instrument are met, the instrument may be enforced according to its terms as augmented by completion [See, U.C.C. § 3-115(b)].

If words or numbers are added to an incomplete instrument without the authority of the signer, then there is an alteration of the incomplete instrument.  The burden of establishing that words or numbers were added to an incomplete instrument without authority of the signer is on the person asserting the lack of authority [See, U.C.C. § 3-115(c) and (d)].

Note the following additional considerations: An item is properly payable if authorized by the customer and in accordance with any agreement between the customer and bank.  A bank may charge the customer’s account for a properly payable item even if the charge creates an overdraft, but the customer is not liable for the overdraft amount if the customer neither signed the item nor benefited from the proceeds of the item, unless otherwise agreed upon.

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