8.3A-106 - A-106. Unconditional promise or order. - Virginia Statutes

§ 8.3A-106. Unconditional promise or order.

(a) Except as provided in this section, for the purposes of § 8.3A-104 (a), apromise or order is unconditional unless it states (i) an express conditionto payment, (ii) that the promise or order is subject to or governed byanother writing, or (iii) that rights or obligations with respect to thepromise or order are stated in another writing. A reference to anotherwriting does not of itself make the promise or order conditional.

(b) A promise or order is not made conditional (i) by a reference to anotherwriting for a statement of rights with respect to collateral, prepayment, oracceleration, or (ii) because payment is limited to resort to a particularfund or source.

(c) If a promise or order requires, as a condition to payment, acountersignature by a person whose specimen signature appears on the promiseor order, the condition does not make the promise or order conditional forthe purposes of § 8.3A-104 (a). If the person whose specimen signatureappears on an instrument fails to countersign the instrument, the failure tocountersign is a defense to the obligation of the issuer, but the failuredoes not prevent a transferee of the instrument from becoming a holder of theinstrument.

(d) If a promise or order at the time it is issued or first comes intopossession of a holder contains a statement, required by applicable statutoryor administrative law, to the effect that the rights of a holder ortransferee are subject to claims or defenses that the issuer could assertagainst the original payee, the promise or order is not thereby madeconditional for the purposes of § 8.3A-104 (a); but if the promise or orderis an instrument, there cannot be a holder in due course of the instrument.

(Code 1950, § 6-355; 1964, c. 219, §§ 8.3-105, 8.3-119; 1992, c. 693.)