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Can you summarize IACO 554.3106?
UNIFORM COMMERCIAL CODE > Unconditional promise or order.
Short Summary
This section of the Iowa Code, specifically under the Uniform Commercial Code, discusses the concept of an unconditional promise or order. It states that a promise or order is considered unconditional unless it includes an express condition to payment, is subject to or governed by another writing, or has rights or obligations stated in another writing. The presence of a reference to another writing does not automatically make the promise or order conditional. The section also clarifies that a promise or order is not made conditional by a reference to another writing for statements related to collateral, prepayment, acceleration, or limited payment sources. Additionally, it explains that if a promise or order requires a countersignature by a person whose specimen signature appears on the instrument, the condition does not make the promise or order conditional. However, failure to countersign the instrument is a defense to the issuer’s obligation, but it does not prevent a transferee from becoming a holder of the instrument. Furthermore, if a promise or order contains a statement, as required by applicable statutory or administrative law, that the rights of a holder or transferee are subject to claims or defenses that the issuer could assert against the original payee, it is not considered conditional. However, if the promise or order is an instrument, there cannot be a holder in due course of the instrument.
Whom does it apply to?
Persons involved in commercial transactions governed by the Iowa Code
What does it govern?
Unconditional promise or order
What are exemptions?
No exemptions are mentioned
What are the Penalties?
No penalties are mentioned
Jurisdiction
Iowa