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Dishonor of Negotiable Instruments

Learn about the rules governing whether and when a note or draft is deemed dishonored, the rules on notice of dishonor, and whether notice might be excused.


Generally speaking, dishonor refers to the refusal or failure to pay or accept an instrument. Under Article 3, various rights and duties are triggered upon dishonor. Thus, it’s crucial to understand when an instrument is deemed dishonored.

I. Dishonor of a Note

The timing of a note’s dishonor depends on whether the note is payable on demand.

Imagine a law student purchased a year’s supply of pizza and executed a promissory note stating: “Law student promises to pay to the order of Pizzeria...