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Conversion of a Negotiable Instrument

Learn about the specific and peculiar rules surrounding an Article 3 claim for conversion of a negotiable instrument.


Like any other form of tangible, moveable property, negotiable instruments can be converted, that is, misappropriated or stolen. To that end, Article 3 sets forth several rules addressing the conversion of negotiable instruments, which we’ll discuss in this lesson.

I. Conversion

As used in Article 3, conversion refers to the unauthorized exercise of control over another’s negotiable instrument, thereby depriving the owner of his or her right to use or possess the instrument. Although the...