2006 Ohio Revised Code - 1303.12. (UCC 3-112) Interest.

§ 1303.12. (UCC 3-112) Interest.
 

(A)  Unless otherwise provided in the instrument, both of the following apply: 

(1) An instrument is not payable with interest. 

(2) 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: 145 v S 147. Eff 8-19-94.
 

Not analogous to former RC § 1303.12 (129 v S 5), repealed 145 v S 147, § 2, eff 8-19-94.

 

Official Comment

1. Under section 3-104(a) 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). It is not intended to validate a provision for interest in an instrument if that provision violates other law.