§ 25-3-106. Unconditional promise or order.
§25‑3‑106. Unconditional promise or order.
(a) Except as providedin this section, for the purposes of G.S. 25‑3‑104(a), a promise ororder is unconditional unless it states (i) an express condition to payment,(ii) that the promise or order is subject to or governed by another writing, or(iii) that rights or obligations with respect to the promise or order arestated in another writing. A reference to another writing does not of itselfmake the promise or order conditional.
(b) A promise or orderis not made conditional (i) by a reference to another writing for a statementof rights with respect to collateral, prepayment, or acceleration, or (ii)because payment is limited to resort to a particular fund or source.
(c) If a promise ororder requires, as a condition to payment, a countersignature by a person whosespecimen signature appears on the promise or order, the condition does not makethe promise or order conditional for the purposes of G.S. 25‑3‑104(a).If the person whose specimen signature appears on an instrument fails tocountersign the instrument, the failure to countersign is a defense to theobligation of the issuer, but the failure does not prevent a transferee of theinstrument from becoming a holder of the instrument.
(d) If a promise or orderat the time it is issued or first comes into possession of a holder contains astatement, required by applicable statutory or administrative law, to theeffect that the rights of a holder or transferee are subject to claims ordefenses that the issuer could assert against the original payee, the promiseor order is not thereby made conditional for the purposes of G.S. 25‑3‑104(a);but if the promise or order is an instrument, there cannot be a holder in duecourse of the instrument. (1899, c. 733, s. 3; Rev., s. 2153; C.S., s. 2984;1965, c. 700, s. 1; 1995, c. 232, s. 1.)