(a) Negotiation is effective even if obtained (i) from an infant, a corporation exceeding its powers, 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(b) To the extent permitted by other law, negotiation may be rescinded or may be subject to other remedies, but those remedies may not be asserted against a subsequent holder in due course or a person paying the instrument in good faith and without knowledge of facts that are a basis for rescission or other remedy.
(1959, P.A. 133, S. 3-202; P.A. 91-304, S. 21.)
History: P.A. 91-304 entirely replaced former provisions re negotiation and endorsement with provisions re negotiation subject to rescission, a restatement of Sec. 42a-3-207, revised to 1991.
See Sec. 42a-3-201(a), 42a-3-203(d) and 42a-3-204(a) for successor provisions to Sec. 42a-3-202, revised to 1991, re negotiation and endorsement.
Cited. 35 CA 326.
Structure Connecticut General Statutes
Title 42a - Uniform Commercial Code
Article 3 - Negotiable Instruments
Section 42a-3-101. - Short title: Uniform Commercial Code–Negotiable Instruments.
Section 42a-3-102. - Subject matter.
Section 42a-3-103. - Definitions.
Section 42a-3-104. - Negotiable instrument.
Section 42a-3-105. - Issue of instrument.
Section 42a-3-106. - Unconditional promise or order.
Section 42a-3-107. - Instrument payable in foreign money.
Section 42a-3-108. - Payable on demand or at definite time.
Section 42a-3-109. - Payable to bearer or to order.
Section 42a-3-110. - Identification of person to whom instrument is payable.
Section 42a-3-111. - Place of payment.
Section 42a-3-112. - Interest.
Section 42a-3-113. - Date of instrument.
Section 42a-3-114. - Contradictory terms of instrument.
Section 42a-3-115. - Incomplete instrument.
Section 42a-3-116. - Joint and several liability. Contribution.
Section 42a-3-117. - Other agreements affecting instrument.
Section 42a-3-118. - Statute of limitations.
Section 42a-3-119. - Notice of right to defend action.
Section 42a-3-201. - Negotiation.
Section 42a-3-202. - Negotiation subject to rescission.
Section 42a-3-203. - Transfer of an instrument. Rights acquired by transfer.
Section 42a-3-204. - Endorsement.
Section 42a-3-205. - Special endorsement. Blank endorsement. Anomalous endorsement.
Section 42a-3-206. - Restrictive endorsement.
Section 42a-3-207. - Reacquisition.
Section 42a-3-208. - Reacquisition.
Section 42a-3-301. - Person entitled to enforce instrument.
Section 42a-3-302. - Holder in due course.
Section 42a-3-303. - Value and consideration.
Section 42a-3-304. - Overdue instrument.
Section 42a-3-305. - Defenses and claims in recoupment.
Section 42a-3-306. - Claims to an instrument.
Section 42a-3-307. - Notice of breach of fiduciary duty.
Section 42a-3-308. - Proof of signatures and status as holder in due course.
Section 42a-3-309. - Enforcement of lost, destroyed or stolen instrument.
Section 42a-3-310. - Effect of instrument on obligation for which taken.
Section 42a-3-311. - Accord and satisfaction by use of instrument.
Section 42a-3-401. - Signature.
Section 42a-3-402. - Signature by representative.
Section 42a-3-403. - Unauthorized signature.
Section 42a-3-404. - Impostors. Fictitious payees.
Section 42a-3-405. - Employer's responsibility for fraudulent endorsement by employee.
Section 42a-3-406. - Negligence contributing to forged signature or alteration of instrument.
Section 42a-3-407. - Alteration.
Section 42a-3-408. - Drawee not liable on unaccepted draft.
Section 42a-3-409. - Acceptance of draft. Certified check.
Section 42a-3-410. - Acceptance varying draft.
Section 42a-3-411. - Refusal to pay cashier's checks, teller's checks and certified checks.
Section 42a-3-412. - Obligation of issuer of note or cashier's check.
Section 42a-3-413. - Obligation of acceptor.
Section 42a-3-414. - Obligation of drawer.
Section 42a-3-415. - Obligation of endorser.
Section 42a-3-416. - Transfer warranties.
Section 42a-3-417. - Presentment warranties.
Section 42a-3-418. - Payment or acceptance by mistake.
Section 42a-3-419. - Instruments signed for accommodation.
Section 42a-3-420. - Conversion of instrument.
Section 42a-3-501. - Presentment.
Section 42a-3-502. - Dishonor.
Section 42a-3-503. - Notice of dishonor.
Section 42a-3-504. - Excused presentment and notice of dishonor.
Section 42a-3-505. - Evidence of dishonor.
Section 42a-3-601. - Discharge and effect of discharge.
Section 42a-3-603. - Tender of payment.
Section 42a-3-604. - Discharge by cancellation or renunciation.
Section 42a-3-605. - Discharge of endorsers and accommodation parties.
Section 42a-3-606. - Impairment of recourse or of collateral.
Section 42a-3-701. - Letter of advice of international sight draft.