Okla. Stat. tit. 12A § 3-104

Current through Laws 2024, c. 6.

Section 3-104 - Negotiable Instrument

(a) Except as provided in subsections (c) and (d) of this section, "negotiable instrument" means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it:

(1) is payable to bearer or to order at the time it is issued or first comes into possession of a holder;

(2) is payable on demand or at a definite time; and

(3) does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, but the promise or order may contain (i) an undertaking or power to give, maintain, or protect collateral to secure payment, (ii) an authorization or power to the holder to confess judgment or realize on or dispose of collateral, or (iii) a waiver of the benefit of any law intended for the advantage or protection of an obligor.

(b) "Instrument" means a negotiable instrument.

(c) An order that meets all of the requirements of subsection (a) of this section, except paragraph (1), and otherwise falls within the definition of "check" in subsection (f) of this section is a negotiable instrument and a check.

(d) A promise or order other than a check is not an instrument if, at the time it is issued or first comes into possession of a holder, it contains a conspicuous statement, however expressed, to the effect that the promise or order is not negotiable or is not an instrument governed by this article.

(e) An instrument is a "note" if it is a promise and is a "draft" if it is an order. If an instrument falls within the definition of both "note" and "draft", a person entitled to enforce the instrument may treat it as either.

(f) "Check" means

(i) a draft, other than a documentary draft, payable on demand and drawn on a bank or

(ii) a cashier's check or teller's check. An instrument may be a check even though it is described on its face by another term, such as "money order".

(g) "Cashier's check" means a draft with respect to which the drawer and drawee are the same bank or branches of the same bank.

(h) "Teller's check" means a draft drawn by a bank (i) on another bank, or (ii) payable at or through a bank.

(i) "Traveler's check" means an instrument that (i) is payable on demand, (ii) is drawn on or payable at or through a bank, (iii) is designated by the term "traveler's check" or by a substantially similar term, and (iv) requires, as a condition to payment, a countersignature by a person whose specimen signature appears on the instrument.

(j) "Certificate of deposit" means an instrument containing an acknowledgment by a bank that a sum of money has been received by the bank and a promise by the bank to repay the sum of money. A certificate of deposit is a note of the bank.

Okla. Stat. tit. 12A, § 3-104

Laws 1961, p. 103, § 3-104; Amended by Laws 1991, SB 25, c. 117, § 29, eff. 1/1/1992.

Oklahoma Code Comment

1. A number of instruments may not qualify as negotiable instruments under the requirements of this Section. Three examples are (1) a certificate of deposit that is not payable to order or to bearer or that is not transferable without restriction, (2) a draft to pay for an oil and gas lease that is payable only on approval of title, and (3) a guaranty agreement uncertain as to amount and time of payment. The panics to these agreements nonetheless may desire the certainty provided by the rules of Article including the Article 3 suretyship rules (updated by the 1992 revisions) in the case of a guaranty. Comment 2 to this Section makes it clear that the parties may contract for the application of one or more of the Article 3 rules by providing in the instrument for that consequence. For example, a note might provide: "The panics agree that if a court determines this instrument is not subject to Article 3 of the Oklahoma Uniform Commercial Code, 12A O.S. §§ 3-101 to 3-605, then their rights and obligations and those of other persons with respect to this instrument shall be governed by the rules of 12A O.S. §§ 3-101 to 3-605."

2. The 1992 UCC revisions rewrote this Section not only to make certain substantive changes, but also to make it more readable and to eliminate provisions that no longer served a real purpose and thus cluttered the statute. As a result, although the wording and style were changed, many principles in and cases interpreting the pre-revision provisions are still good. For example, the authorization contained in subsection (a)(3) bears only on the negotiability of the instrument, and does not validate a term that otherwise would be invalid; the truisms stated in pre-revision sub sections 3-106(2) and 3-112(2) are not restated. Compare, e.g., subsection (a)(3)(ii) with 14A O.S. § 3-407, as to an authorization to confess judgment on this point. The authorization in subsection (a)(3) also encompasses the provisions permitted by pre-revision sub section 3-112(1) , and thus the cases annotated under that provision continue as authority to the extent they were authority under pre-revision Section 3-112 . Further, nothing in current Section 3-104, or sections related to it, should be interpreted to question the holdings as to the scope of Article 3 in the following cases: Wickware v. National Mortgage Corp. of Am., 570 P.2d 330 (Okra. 1977); Sunrizon Homes, Inc. v. American Guar. Inv.Corp., 782 P.2d 103 (Okra. 1988), James Talcott, Inc. v. Finley, 389 P.2d 988 (Okra. 1964) (but as to references to rights with respect to collateral, prepayment or acceleration, see sub section 3-106(b)(i) ); Walls v. Morris Chevrolet, Inc., 515 P.2d 1405 (Okra. Ct. App. 1973); and Circle v. Jim Walter Homes, Inc., 535 F.2d 583 (lOth Cir. 1976), on remand, 470 F.Supp. 39 (W.D. Okla. 1979), aff'd, 654 F.2d 688 (lOth Cir. 19811.