Colorado Code
Part 2 - Negotiation, Transfer, and Indorsement
§ 4-3-206. Restrictive Indorsement

(1) Unless there is notice of breach of fiduciary duty as provided in section 4-3-307, a person who purchases the instrument from the indorsee or takes the instrument from the indorsee for collection or payment may pay the proceeds of payment or the value given for the instrument to the indorsee without regard to whether the indorsee violates a fiduciary duty to the indorser.
(2) A subsequent transferee of the instrument or person who pays the instrument is neither given notice nor otherwise affected by the restriction in the indorsement unless the transferee or payor knows that the fiduciary dealt with the instrument or its proceeds in breach of fiduciary duty.



Source: L. 94: Entire article R&RE, p. 852, § 1, effective January 1, 1995.
Editor's note: This section is similar to former §§ 4-3-205 and 4-3-206 as they existed prior to 1994.

Structure Colorado Code