- (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, or mistake, or (iii) in breach of duty or as part of an illegal transaction.
- (b) To the extent permitted by other law, negotiation may be rescinded or may be subject to other remedies, but those remedies may not be asserted against a subsequent holder in due course or a person paying the instrument in good faith and without knowledge of facts that are a basis for rescission or other remedy.
See Sec. 42a-3-201(a), 42a-3-203(d) and 42a-3-204(a) for successor provisions to Sec. 42a-3-202, revised to 1991, re negotiation and endorsement.
(1959, P.A. 133, S. 3-202; P.A. 91-304, S. 21.)
History: P.A. 91-304 entirely replaced former provisions re negotiation and endorsement with provisions re negotiation subject to rescission, a restatement of Sec. 42a-3-207, revised to 1991.