2006 Ohio Revised Code - 1303.04. (UCC 3-105(b)) Issue of instrument.

§ 1303.04. (UCC 3-105(b)) Issue of instrument.
 

An unissued instrument, or an unissued incomplete instrument that is completed, is binding on the maker or drawer, but nonissuance is a defense. An instrument that is conditionally issued or is issued for a special purpose is binding on the maker or drawer, but the failure of the condition or special purpose to be fulfilled is a defense. 
 

HISTORY: 145 v S 147. Eff 8-19-94.
 

Not analogous to former RC § 1303.04 (129 v S 5; 131 v 422), repealed 145 v S 147, § 2, eff 8-19-94.

Not analogous to former RC § 1303.04 (RS § 3174g; 95 v 182; GC § 8194; Bureau of Code Revision, 10-1-53), repealed 129 v S 5, § 2, eff 7-1-62; but see former RC § 1301.05.

 

Official Comment

1. Under former section 3-102(1)(a) "issue" was defined as the first delivery to a "holder or a remitter" but the term "remitter" was neither defined nor otherwise used.  In revised article 3, section 3-105(a) defines "issue" more broadly to include the first delivery to anyone by the drawer or maker for the purpose of giving rights to anyone on the instrument.  "Delivery" with respect to instruments is defined in section 1-201(14) as meaning "voluntary transfer of possession." 

2. Subsection (b) continues the rule that nonissuance, conditional issuance or issuance for a special purpose is a defense of the maker or the drawer of an instrument.  Thus, the defense can be asserted against a person other than a holder in due course. The same rule applies to nonissuance of an incomplete instrument later completed. 

3.  Subsection (c) defines "issuer" to include the signer of an unissued instrument for convenience of reference in the statute.