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What Will Not Affect Negotiability?

Factors Not Affecting Negotiability

The first important factor that might, at first glance, appear to affect negotiability of negotiable instruments, but is in fact exempt under the Uniform Commercial Code (UCC), is the date on the face of the instrument, or even whether or not the instrument is undated. Business negotiations are often extended proceedings and the exact date on which a negotiable instrument will be marked may vary widely. Some might be worried that the UCC contains provisions which would significantly concern the date attached to the negotiable instrument.

Next, as business negotiations are often lengthy, sometimes negotiable instruments will be modified after they are initially drawn up. This will often involve typewritten addenda or alterations to the negotiable instrument. Even handwritten notes make make their way onto a given negotiable instrument. Many in business negotiations would then worry that the negotiability of the instrument would be compromised under the UCC. But in fact, these alterations are generally acceptable and do not undermine the overall negotiability of the instruments. Some alterations might affect the negotiability of the instrument, depending upon the exact content of those notes.

Leaving out certain pieces of information will likewise do nothing to prevent an instrument from being considered negotiable. For all that business negotiations seek comprehensiveness, sometimes information will be left out of such a negotiable instruments. In other instances, such information will purposely be left out, such that those values will default to whatever is listed or determined by the UCC.

Finally, if the negotiable instrument specifically has a note on it that says that it is "non-negotiable" or "not governed by Article 3," it still may remain negotiable if it is a check. Such notes would not affect a check's negotiability because a check is a specifically defined form of negotiable instrument. Any other negotiable instrument, however, might be made non-negotiable.

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