North Carolina Statutes

Chapter 25 Uniform Commercial Code

Article 1 - General Provisions.

  • § 25-1-101   Short titles
    (a) This Chapter may be cited as the Uniform Commercial Code. (b) This Article may be cited as Uniform Commercial Code General Provisions. (1965, c....
  • § 25-1-102   Scope of Article
    Except as provided in G.S. 25‑1‑301, this Article applies to a transaction to the extent that it is governed by another Article of this Chapter....
  • § 25-1-103   Construction of this Chapter to promote its purposes and policies; applicability of supplemental principles of law
    (a) This Chapter shall be liberally construed and applied to promote its underlying purposes and policies, which are: (1) To simplify, clarify, and modernize the...
  • § 25-1-104   Construction against implied repeal
    This Chapter being a general act intended as a unified coverage of its subject matter, no part of it shall be deemed to be impliedly...
  • § 25-1-105   Severability
    If any provision or clause of this Chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other...
  • § 25-1-106   Use of singular and plural; gender
    In this Chapter, unless the statutory context otherwise requires: (1) Words in the singular number include the plural, and those in the plural include the...
  • § 25-1-107   Section captions
    Section captions are part of this Chapter. The subsection headings in Article 9 of this Chapter are not parts of this Chapter. (1965, c. 700,...
  • § 25-1-108   Relation to Electronic Signatures in Global and National Commerce Act
    This Article modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. 7001, et seq., except that nothing in...
  • § 25-1-201   General definitions
    (a) Unless the context otherwise requires, words or phrases defined in this section, or in the additional definitions contained in other Articles of this Chapter...
  • § 25-1-202   Notice; knowledge
    (a) Subject to subsection (f) of this section, a person has "notice" of a fact if the person: (1) Has actual knowledge of it; (2)...
  • § 25-1-203   Lease distinguished from security interest
    (a) Whether a transaction in the form of a lease creates a lease or security interest is determined by the facts of each case. (b)...
  • § 25-1-204   Value
    Except as otherwise provided in Articles 3, 4, and 5 of this Chapter, a person gives value for rights if the person acquires them: (1)...
  • § 25-1-205   Reasonable time; seasonableness
    (a) Whether a time for taking an action required by this Chapter is reasonable depends on the nature, purpose, and circumstances of the action. (b)...
  • § 25-1-206   Presumptions
    Whenever this Chapter creates a "presumption" with respect to a fact, or provides that a fact is "presumed," the trier of fact must find the...
  • § 25-1-301   Territorial applicability; parties' power to choose applicable law
    (a) Except as otherwise provided in this section, when a transaction bears a reasonable relation to this State and also to another state or nation...
  • § 25-1-302   Variation by agreement
    (a) Except as otherwise provided in subsection (b) of this section or elsewhere in this Chapter, the effect of provisions of this Chapter may be...
  • § 25-1-303   Course of performance, course of dealing, and usage of trade
    (a) A "course of performance" is a sequence of conduct between the parties to a particular transaction that exists if: (1) The agreement of the...
  • § 25-1-304   Obligation of good faith
    Every contract or duty within this Chapter imposes an obligation of good faith in its performance and enforcement. (1965, c. 700, s. 1; 2006‑112, s.
  • § 25-1-305   Remedies to be liberally administered
    (a) The remedies provided by this Chapter shall be liberally administered to the end that the aggrieved party may be put in as good a...
  • § 25-1-306   Waiver or renunciation of claim or right after breach
    A claim or right arising out of an alleged breach may be discharged in whole or in part without consideration by agreement of the aggrieved...
  • § 25-1-307   Prima facie evidence by third-party documents
    A document in due form purporting to be a bill of lading, policy or certificate of insurance, official weigher's or inspector's certificate, consular invoice, or...
  • § 25-1-308   Performance or acceptance under reservation of rights
    (a) A party that with explicit reservation of rights performs or promises performance or assents to performance in a manner demanded or offered by the...
  • § 25-1-309   Option to accelerate at will
    A term providing that one party or that party's successor in interest may accelerate payment or performance or require collateral or additional collateral "at will"...
  • § 25-1-310   Subordinated obligations
    An obligation may be issued as subordinated to performance of another obligation of the person obligated, or a creditor may subordinate its right to performance...

Article 2 - Sales.

Article 2A - Leases.

Article 3 - Negotiable Instruments.

  • § 25-3-101   Short title
    This Article may be cited as Uniform Commercial Code Negotiable Instruments. (1899, c. 733, ss. 128, 191; Rev., ss. 2278, 2340; C.S., ss. 2976, 3110;...
  • § 25-3-102   Subject matter
    (a) This Article applies to negotiable instruments. It does not apply to money, to payment orders governed by Article 4A, or to securities governed by...
  • § 25-3-103   Definitions
    (a) In this Article: (1) "Acceptor" means a drawee who has accepted a draft. (2) "Drawee" means a person ordered in a draft to make...
  • § 25-3-104   Negotiable instrument
    (a) Except as provided in subsections (c) and (d) of this section, "negotiable instrument" means an unconditional promise or order to pay a fixed amount...
  • § 25-3-105   Issue of instrument
    (a) "Issue" means the first delivery of an instrument by the maker or drawer, whether to a holder or nonholder, for the purpose of giving...
  • § 25-3-106   Unconditional promise or order
    (a) Except as provided in this section, for the purposes of G.S. 25‑3‑104(a), a promise or order is unconditional unless it states (i) an express...
  • § 25-3-107   Instrument payable in foreign money
    Unless the instrument otherwise provides, an instrument that states the amount payable in foreign money may be paid in the foreign money or in an...
  • § 25-3-108   Payable on demand or at definite time
    (a) A promise or order is "payable on demand" if it (i) states that it is payable on demand or at sight, or otherwise indicates...
  • § 25-3-109   Payable to bearer or to order
    (a) A promise or order is payable to bearer if it: (1) States that it is payable to bearer or to the order of bearer...
  • § 25-3-110   Identification of person to whom instrument is payable
    (a) The person to whom an instrument is initially payable is determined by the intent of the person, whether or not authorized, signing as, or...
  • § 25-3-111   Place of payment
    Except as otherwise provided for items in Article 4, an instrument is payable at the place of payment stated in the instrument. If no place...
  • § 25-3-112   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...
  • § 25-3-113   Date of instrument
    (a) An instrument may be antedated or postdated. The date stated determines the time of payment if the instrument is payable at a fixed period...
  • § 25-3-114   Contradictory terms of instrument
    If an instrument contains contradictory terms, typewritten terms prevail over printed terms, handwritten terms prevail over both, and words prevail over numbers. (1899, c. 733,...
  • § 25-3-115   Incomplete instrument
    (a) "Incomplete instrument" means a signed writing, whether or not issued by the signer, the contents of which show at the time of signing that...
  • § 25-3-116   Joint and several liability; contribution
    (a) Except as otherwise provided in the instrument, two or more persons who have the same liability on an instrument as makers, drawers, acceptors, indorsers...
  • § 25-3-117   Other agreements affecting instrument
    Subject to applicable law regarding exclusion of proof of contemporaneous or previous agreements, the obligation of a party to an instrument to pay the instrument...
  • § 25-3-118   Statute of limitations
    (a) Except as provided in subsection (e) of this section, an action to enforce the obligation of a party to pay a note payable at...
  • § 25-3-119   Notice of right to defend action
    In an action for breach of an obligation for which a third person is answerable over pursuant to this Article or Article 4, the defendant...
  • § 25-3-201   Negotiation
    (a) "Negotiation" means a transfer of possession, whether voluntary or involuntary, of an instrument by a person other than the issuer to a person who...
  • § 25-3-202   Negotiation subject to rescission
    (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,...
  • § 25-3-203   Transfer of instrument; rights acquired by transfer
    (a) An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving...
  • § 25-3-204   Indorsement
    (a) "Indorsement" means a signature, other than that of a signer as maker, drawer, or acceptor, that alone or accompanied by other words is made...
  • § 25-3-205   Special indorsement; blank indorsement; anomalous indorsement
    (a) If an indorsement is made by the holder of an instrument, whether payable to an identified person or payable to bearer, and the indorsement...
  • § 25-3-206   Restrictive indorsement
    (a) An indorsement limiting payment to a particular person or otherwise prohibiting further transfer or negotiation of the instrument is not effective to prevent further...
  • § 25-3-207   Reacquisition
    Reacquisition of an instrument occurs if it is transferred to a former holder by negotiation or otherwise. A former holder who reacquires the instrument may...
  • § 25-3-301   Person entitled to enforce instrument
    "Person entitled to enforce" an instrument means (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights...
  • § 25-3-302   Holder in due course
    (a) Subject to subsection (c) of this section and G.S. 25‑3‑106(d), "holder in due course" means the holder of an instrument if: (1) The instrument...
  • § 25-3-303   Value and consideration
    (a) An instrument is issued or transferred for value if: (1) The instrument is issued or transferred for a promise of performance, to the extent...
  • § 25-3-304   Overdue instrument
    (a) An instrument payable on demand becomes overdue at the earliest of the following times: (1) On the day after the day demand for payment...
  • § 25-3-305   Defenses and claims in recoupment
    (a) Except as stated in subsection (b) of this section, the right to enforce the obligation of a party to pay an instrument is subject...
  • § 25-3-306   Claims to an instrument
    A person taking an instrument, other than a person having rights of a holder in due course, is subject to a claim of a property...
  • § 25-3-307   Notice of breach of fiduciary duty
    (a) In this section: (1) "Fiduciary" means an agent, trustee, partner, corporate officer or director, or other representative owing a fiduciary duty with respect to...
  • § 25-3-308   Proof of signatures and status as holder in due course
    (a) In an action with respect to an instrument, the authenticity of, and authority to make, each signature on the instrument is admitted unless specifically...
  • § 25-3-309   Enforcement of lost, destroyed, or stolen instrument
    (a) A person not in possession of an instrument is entitled to enforce the instrument if (i) the person was in possession of the instrument...
  • § 25-3-310   Effect of instrument on obligation for which taken
    (a) Unless otherwise agreed, if a certified check, cashier's check, or teller's check is taken for an obligation, the obligation is discharged to the same...
  • § 25-3-311   Accord and satisfaction by use of instrument
    (a) If a person against whom a claim is asserted proves that (i) that person in good faith tendered an instrument to the claimant as...
  • § 25-3-312   Lost, destroyed, or stolen cashier's check, teller's check, or certified check
    (a) In this section: (1) "Check" means a cashier's check, teller's check, or certified check. (2) "Claimant" means a person who claims the right to...
  • § 25-3-401   Signature
    (a) A person is not liable on an instrument unless (i) the person signed the instrument, or (ii) the person is represented by an agent...
  • § 25-3-402   Signature by representative
    (a) If a person acting, or purporting to act, as a representative signs an instrument by signing either the name of the represented person or...
  • § 25-3-403   Unauthorized signature
    (a) Unless otherwise provided in this Article or Article 4, an unauthorized signature is ineffective except as the signature of the unauthorized signer in favor...
  • § 25-3-404   Impostors; fictitious payees
    (a) If an impostor, by use of the mails or otherwise, induces the issuer of an instrument to issue the instrument to the impostor, or...
  • § 25-3-405   Employer's responsibility for fraudulent indorsement by employee
    (a) In this section: (1) "Employee" includes an independent contractor and employee of an independent contractor retained by the employer. (2) "Fraudulent indorsement" means (i)...
  • § 25-3-406   Negligence contributing to forged signature or alteration of instrument
    (a) A person whose failure to exercise ordinary care substantially contributes to an alteration of an instrument or to the making of a forged signature...
  • § 25-3-407   Alteration
    (a) "Alteration" means (i) an unauthorized change in an instrument that purports to modify in any respect the obligation of a party, or (ii) an...
  • § 25-3-408   Drawee not liable on unaccepted draft
    A check or other draft does not of itself operate as an assignment of funds in the hands of the drawee available for its payment,...
  • § 25-3-409   Acceptance of draft; certified check
    (a) "Acceptance" means the drawee's signed agreement to pay a draft as presented. It must be written on the draft and may consist of the...
  • § 25-3-410   Acceptance varying draft
    (a) If the terms of a drawee's acceptance vary from the terms of the draft as presented, the holder may refuse the acceptance and treat...
  • § 25-3-411   Refusal to pay cashier's checks, teller's checks, and certified checks
    (a) In this section, "obligated bank" means the acceptor of a certified check or the issuer of a cashier's check or teller's check bought from...
  • § 25-3-412   Obligation of issuer of note or cashier's check
    The issuer of a note or cashier's check or other draft drawn on the drawer is obliged to pay the instrument (i) according to its...
  • § 25-3-413   Obligation of acceptor
    (a) The acceptor of a draft is obliged to pay the draft (i) according to its terms at the time it was accepted, even though...
  • § 25-3-414   Obligation of drawer
    (a) This section does not apply to cashier's checks or other drafts drawn on the drawer. (b) If an unaccepted draft is dishonored, the drawer...
  • § 25-3-415   Obligation of indorser
    (a) Subject to subsections (b), (c), (d), and (e) of this section and to G.S. 25‑3‑419(d), if an instrument is dishonored, an indorser is obliged...
  • § 25-3-416   Transfer warranties
    (a) A person who transfers an instrument for consideration warrants to the transferee and, if the transfer is by indorsement, to any subsequent transferee that:...
  • § 25-3-417   Presentment warranties
    (a) If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, (i) the person...
  • § 25-3-418   Payment or acceptance by mistake
    (a) Except as provided in subsection (c) of this section, if the drawee of a draft pays or accepts the draft and the drawee acted...
  • § 25-3-419   Instruments signed for accommodation
    (a) If an instrument is issued for value given for the benefit of a party to the instrument, the "accommodated party", and another party to...
  • § 25-3-420   Conversion of instrument
    (a) The law applicable to conversion of personal property applies to instruments. An instrument is also converted if it is taken by transfer, other than...
  • § 25-3-501   Presentment
    (a) "Presentment" means a demand made by or on behalf of a person entitled to enforce an instrument (i) to pay the instrument made to...
  • § 25-3-502   Dishonor
    (a) Dishonor of a note is governed by the following rules: (1) If the note is payable on demand, the note is dishonored if presentment...
  • § 25-3-503   Notice of dishonor
    (a) The obligation of an indorser stated in G.S. 25‑3‑415(a) and the obligation of a drawer stated in G.S. 25‑3‑414(d) may not be enforced unless...
  • § 25-3-504   Excused presentment and notice of dishonor
    (a) Presentment for payment or acceptance of an instrument is excused if (i) the person entitled to present the instrument cannot with reasonable diligence make...
  • § 25-3-505   Evidence of dishonor
    (a) The following are admissible as evidence and create a presumption of dishonor and of any notice of dishonor stated: (1) A document regular in...
  • § 25-3-506   Collection of processing fee for returned checks
    A person who accepts a check in payment for goods or services or his assignee may charge and collect a processing fee, not to exceed...
  • § 25-3-601   Discharge and effect of discharge
    (a) The obligation of a party to pay the instrument is discharged as stated in this Article or by an act or agreement with the...
  • § 25-3-602   Payment
    (a) Subject to subsection (b) of this section, an instrument is paid to the extent payment is made (i) by or on behalf of a...
  • § 25-3-603   Tender of payment
    (a) If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument, the effect of...
  • § 25-3-604   Discharge by cancellation or renunciation
    (a) A person entitled to enforce an instrument, with or without consideration, may discharge the obligation of a party to pay the instrument (i) by...
  • § 25-3-605   Discharge of indorsers and accommodation parties
    (a) In this section, the term "indorser" includes a drawer having the obligation described in G.S. 25‑3‑414(d). (b) Discharge, under G.S. 25‑3‑604, of the obligation...

Article 4 - Bank Deposits and Collections.

Article 4A - Funds Transfers.

Article 5 - Letters of Credit.

  • § 25-5-101   Short title
    This article may be cited as Uniform Commercial Code Letters of Credit. (1999‑73, s. 1.)
  • § 25-5-102   Definitions
    (a) In this Article: (1) "Adviser" means a person who, at the request of the issuer, a confirmer, or another adviser, notifies or requests another...
  • § 25-5-103   Scope
    (a) This Article applies to letters of credit and to certain rights and obligations arising out of transactions involving letters of credit. (b) The statement...
  • § 25-5-104   Formal requirements
    A letter of credit, confirmation, advice, transfer, amendment, or cancellation may be issued in any form that is a record and is authenticated (i) by...
  • § 25-5-105   Consideration
    Consideration is not required to issue, amend, transfer, or cancel a letter of credit, advice, or confirmation. (1999‑73, s. 1.)
  • § 25-5-106   Issuance, amendment, cancellation, and duration
    (a) A letter of credit is issued and becomes enforceable according to its terms against the issuer when the issuer sends or otherwise transmits it...
  • § 25-5-107   Confirmer, nominated person, and adviser
    (a) A confirmer is directly obligated on a letter of credit and has the rights and obligations of an issuer to the extent of its...
  • § 25-5-108   Issuer's rights and obligations
    (a) Except as otherwise provided in G.S. 25‑5‑109, an issuer shall honor a presentation that, as determined by the standard practice referred to in subsection...
  • § 25-5-109   Fraud and forgery
    (a) If a presentation is made that appears on its face strictly to comply with the terms and conditions of the letter of credit, but...
  • § 25-5-110   Warranties
    (a) If its presentation is honored, the beneficiary warrants: (1) To the issuer, any other person to whom presentation is made, and the applicant that...
  • § 25-5-111   Remedies
    (a) If an issuer wrongfully dishonors or repudiates its obligation to pay money under a letter of credit before presentation, the beneficiary, successor, or nominated...
  • § 25-5-112   Transfer of letter of credit
    (a) Except as otherwise provided in G.S. 25‑5‑113, unless a letter of credit provides that it is transferable, the right of a beneficiary to draw...
  • § 25-5-113   Transfer by operation of law
    (a) A successor of a beneficiary may consent to amendments, sign and present documents, and receive payment or other items of value in the name...
  • § 25-5-114   Assignment of proceeds
    (a) In this section, "proceeds of a letter of credit" means the cash, check, accepted draft, or other item of value paid or delivered upon...
  • § 25-5-115   Statute of limitations
    An action to enforce a right or obligation arising under this Article must be commenced within one year after the expiration date of the relevant...
  • § 25-5-116   Choice of law and forum
    (a) The liability of an issuer, nominated person, or adviser for action or omission is governed by the law of the jurisdiction chosen by an...
  • § 25-5-117   Subrogation of issuer, applicant, and nominated person
    (a) An issuer that honors a beneficiary's presentation is subrogated to the rights of the beneficiary to the same extent as if the issuer were...
  • § 25-5-118   Security interest of issuer or nominated person
    (a) An issuer or nominated person has a security interest in a document presented under a letter of credit to the extent that the issuer...

Article 6 - Bulk Transfers.

Article 7 - Documents of Title.

Article 8 - Investment Securities.

Article 9 - Secured Transactions.

Article 10 - Effective Date and Repealer.

Article 11 - 1975 Amendatory Act - Effective Date and Transition Provisions.

  • § 25-11-101   Effective date
    This act shall become effective at 12:01 A.M. on July 1, 1976. (1975, c. 862, s. 8.)
  • § 25-11-101.1   Definitions
    (1) As used in this article, "old article 9" means: G.S. 25‑1‑105, 25‑1‑201(9), 25‑1‑201(37), 25‑2‑107, 25‑5‑116, and article 9 of chapter 25 of the General...
  • § 25-11-102   Preservation of old transition provisions
    The provisions of article 10 of chapter 25 of the General Statutes of North Carolina, Uniform Commercial Code, G.S. 25‑10‑101 through 25‑10‑106, thereof shall continue...
  • § 25-11-103   Transition to new article 9; general rule
    (1) Transactions validly entered into after midnight on June 30, 1967, and before July 1, 1976, and which were subject to the provisions of old...
  • § 25-11-104   Transition provisions on change of requirement of filing
    A security interest for the perfection of which filing or the taking of possession was required under old article 9 and which attached prior to...
  • § 25-11-105   Transition provisions on change of place of filing
    (1) A financing statement or continuation statement filed prior to July 1, 1976, which shall not have lapsed prior to July 1, 1976, shall remain...
  • § 25-11-106   Required refilings
    (1) If a security interest is perfected or has priority when this act takes effect as to all persons or as to certain persons without...
  • § 25-11-107   Transition provisions as to priorities
    Except as otherwise provided in article 11, old article 9 shall apply to any questions of priority if the positions of the parties were fixed...
  • § 25-11-108   Presumption that rule of law continues unchanged
    Unless a change in law has clearly been made, the provisions of new article 9 shall be deemed declaratory of the meaning of the old...