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Can you summarize MNST 336.3-414?
UNIFORM COMMERCIAL CODE > OBLIGATION OF DRAWER.
Short Summary
This legal document, section 336.3-414 of the Minnesota Statutes, governs the obligation of the drawer. It applies to drawers of unaccepted drafts, excluding cashier’s checks or other drafts drawn on the drawer. If an unaccepted draft is dishonored, the drawer is obliged to pay the draft according to its terms at the time it was issued or, if not issued, at the time it first came into possession of a holder. If the drawer signed an incomplete instrument, the payment obligation is based on its terms when completed, as stated in sections 336.3-115 and 336.3-407. The obligation is owed to a person entitled to enforce the draft or to an endorser who paid the draft under section 336.3-415. If a draft is accepted by a bank, the drawer is discharged from the obligation, regardless of when or by whom acceptance was obtained. If a draft is accepted by a non-bank entity, the drawer’s obligation to pay the draft if it is dishonored by the acceptor is the same as the obligation of an endorser under section 336.3-415. If a draft states that it is drawn ‘without recourse’ or disclaims liability of the drawer to pay the draft, the drawer is not liable under subsection (b) to pay the draft if it is not a check. However, this disclaimer is not effective if the draft is a check. Additionally, if a check is not presented for payment or given to a depositary bank for collection within 30 days after its date, and the drawee suspends payments after the 30-day period without paying the check, the drawer may discharge its obligation to pay the check by assigning to the person entitled to enforce the check the rights of the drawer against the drawee with respect to the funds.
Whom does it apply to?
Drawers of unaccepted drafts
What does it govern?
Obligation of the drawer
What are exemptions?
This section does not apply to cashier's checks or other drafts drawn on the drawer.
What are the Penalties?
No specific penalties mentioned.
Jurisdiction
Minnesota