U.C.C. § 3-104 — Negotiable Instrument

Editorial note. Section 3-104(a) states the formal requirements of negotiability. Section 3-104(b) provides that 'instrument' means a negotiable instrument. Subsections (c)–(j) classify the instrument as a note or draft, a check, a certificate of deposit, a cashier's or teller's check, or a traveler's check.

Editorial note. The requirements descend from the law merchant as codified in Lord Mansfield's decisions and Section 1 of the English Bills of Exchange Act 1882. The Uniform Negotiable Instruments Law (1896) supplied the pre-Code American formulation.

Editorial note. Section 3-104 is the gateway to Article 3. A writing that does not satisfy § 3-104 is not a negotiable instrument, though it may still be enforceable as a contract.

Editorial note. Litigation on § 3-104 centers on the 'no other undertaking' requirement and on whether an instrument states a 'fixed amount of money.' Adjustable-rate notes present recurrent questions.

Editorial note. See U.C.C. § 3-103 (definitions); § 3-106 (unconditional promise or order); § 3-108 (payable on demand or at a definite time); § 3-112 (interest).

Editorial note. Every controversy over the enforcement of a note or check begins with § 3-104. Only a negotiable instrument is subject to the holder-in-due-course rules of §§ 3-302, 3-305.