§ 25-3-202. Negotiation subject to rescission. - North Carolina Statutes

§25‑3‑202.  Negotiation subject to rescission.

(a)        Negotiation iseffective even if obtained (i) from an infant, a corporation exceeding itspowers, or a person without capacity, (ii) by fraud, duress, or mistake, or(iii) in breach of duty or as part of an illegal transaction.

(b)        To the extentpermitted by other law, negotiation may be rescinded or may be subject to otherremedies, but those remedies may not be asserted against a subsequent holder indue course or a person paying the instrument in good faith and withoutknowledge of facts that are a basis for rescission or other remedy. (1899,c. 733, ss. 22, 58, 59; Rev., ss. 2180, 2207, 2208; C.S., ss. 3012, 3039, 3040;1965, c. 700, s. 1; 1995, c. 232, s. 1.)