§ 3-206. Limitations or conditions imposed by indorsement
West's Annotated Code of MarylandCommercial Law
MD Code, Commercial Law, § 3-206
§ 3-206. Limitations or conditions imposed by indorsement
(b) An indorsement stating a condition to the right of the indorsee to receive payment does not affect the right of the indorsee to enforce the instrument. A person paying the instrument or taking it for value or collection may disregard the condition, and the rights and liabilities of that person are not affected by whether the condition has been fulfilled.
(c) If an instrument bears an indorsement (i) described in § 4-201(b), or (ii) in blank or to a particular bank using the words “for deposit”, “for collection”, or other words indicating a purpose of having the instrument collected by a bank for the indorser or for a particular account, the following rules apply:
(1) Unless there is notice of breach of fiduciary duty as provided in § 3-307, a person who purchases the instrument from the indorsee or takes the instrument from the indorsee for collection or payment may pay the proceeds of payment or the value given for the instrument to the indorsee without regard to whether the indorsee violates a fiduciary duty to the indorser.
(e) The presence on an instrument of an indorsement to which this section applies does not prevent a purchaser of the instrument from becoming a holder in due course of the instrument unless the purchaser is a converter under subsection (c) or has notice or knowledge of breach of fiduciary duty as stated in subsection (d).
Credits
Added by Acts 1996, c. 91, § 2, eff. Jan. 1, 1997.
MD Code, Commercial Law, § 3-206, MD COML § 3-206
Current through legislation effective through April 9, 2023, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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