2018 New Mexico Statutes
Chapter 55 - Uniform Commercial Code
Article 3 - Negotiable Instruments
Section 55-3-112 - Interest.
(a) Unless otherwise provided in the instrument, (i) an instrument is not payable with interest, and (ii) interest on an interest-bearing instrument is payable from the date of the instrument.
(b) Interest may be stated in an instrument as a fixed or variable amount of money or it may be expressed as a fixed or variable rate or rates. The amount or rate of interest may be stated or described in the instrument in any manner and may require reference to information not contained in the instrument. If an instrument provides for interest, but the amount of interest payable cannot be ascertained from the description, interest is payable at the judgment rate in effect at the place of payment of the instrument and at the time interest first accrues.
History: 1978 Comp., § 55-3-112, enacted by Laws 1992, ch. 114, § 99.
OFFICIAL COMMENTS
UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.
1. Under Section 3-104(a) [55-3-104 NMSA 1978] the requirement of a "fixed amount" applies only to principal. The amount of interest payable is that described in the instrument. If the description of interest in the instrument does not allow for the amount of interest to be ascertained, interest is payable at the judgement rate. Hence, if an instrument calls for interest, the amount of interest will always be determinable. If a variable rate of interest is prescribed, the amount of interest is ascertainable by reference to the formula or index described or referred to in the instrument. The last sentence of Subsection (b) replaces Subsection (d) of the former Section 3-118.
2. The purpose of Subsection (b) is to clarify the meaning of "interest" in the introductory clause of Section 3-104(a) [55-3-104 NMSA 1978]. It is not intended to validate a provision for interest in an instrument if that provision violates other law.
Repeals. — Laws 1992, ch. 114, § 237 repealed former 55-3-112 NMSA 1978, as enacted by Laws 1961, ch. 96, § 3-112, relating to terms and omissions not affecting negotiability, effective July 1, 1992. Laws 1992, ch. 114, § 99, enacted a new section, effective July 1, 1992. For provisions of former section, see the 1991 NMSA 1978 on NMOneSource.com.
