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Can you summarize MNST 336.3-206?
UNIFORM COMMERCIAL CODE > RESTRICTIVE ENDORSEMENT.
Short Summary
This legal document, governed by the Minnesota Statutes under the Uniform Commercial Code, specifically section 336.3-206, addresses the concept of restrictive endorsement. It states that an endorsement on an instrument that limits payment to a particular person or prohibits further transfer or negotiation of the instrument is not effective to prevent such transfer or negotiation. Additionally, an endorsement stating a condition to the right of the endorsee to receive payment does not affect the endorsee’s right to enforce the instrument. The document also outlines rules for different scenarios involving endorsements, such as when an instrument bears an endorsement described in section 336.4-201(b) or is endorsed to a particular bank for deposit or collection. It further discusses the rights and liabilities of various parties involved in the transfer or collection of the instrument. The document also covers endorsements made by an endorsee as an agent, trustee, or fiduciary for the benefit of the endorser or another person. It clarifies the rules regarding payment to the endorsee and the rights of subsequent transferees or payors. The presence of such endorsements does not prevent a purchaser from becoming a holder in due course, unless they have notice or knowledge of breach of fiduciary duty. The document concludes by stating that it does not prohibit or limit the effectiveness of a restrictive endorsement made under a specific section. Overall, this legal document provides guidance on the use and implications of restrictive endorsements in the context of negotiable instruments.
Whom does it apply to?
Parties involved in the transfer or negotiation of negotiable instruments
What does it govern?
Restrictive endorsement
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Minnesota