1. (a) An instrument payable on demand becomes overdue at the earliest of the following times:
2. (1) on the day after the day demand for payment is duly made;
3. (2) if the instrument is a check, ninety (90) days after its date; or
4. (3) if the instrument is not a check, when the instrument has been outstanding for a period of time after its date which is unreasonably long under the circumstances of the particular case in light of the nature of the instrument and usage of the trade.

5. (b) With respect to an

   instrument payable at a definite time the following rules apply:

6. (1) If the principal is payable in installments and a due date has not been accelerated, the instrument becomes overdue upon default under the instrument for nonpayment of an installment, and the instrument remains overdue until the default is cured;
7. (2) If the principal is not payable in installments and the due date has not been accelerated, the instrument becomes overdue on the day after the due date; and
8. (3) If a due date with respect to principal has been accelerated, the instrument becomes overdue on the day after the accelerated due date.

9. (c) Unless the due date of principal has been accelerated, an

   instrument does not become overdue if there is default in payment of interest but no default in payment of principal.

   Oklahoma Code Comment

10. 1. Section

    3-304 is important for the purpose of determining whether a holder is a holder in due course. To be a holder in due course, the holder must take without notice that an instrument is overdue. Under subsection (a)(l), a demand instrument is overdue one day after the day demand for payment is made. Consequently, under subsection 3-304(a)(1), one could still be a holder in due course after demand for payment is made, as long as the holder takes the instrument prior to the day after the day demand for payment is dub made. This set of facts would create a different result than under pre-revision subsection 3-304(3)(c). Under that subsection, the instrument was overdue after demand was made. Of course, in either case, there must be notice that the instrument is overdue to destroy holder in due course status.

    If the

    instrument is a check, it is overdue 90 days after its date. UCC § 3-304(a)(2). Under pre-revision subsection 3-304(3)(c), the check was presumed overdue 30 days after its issue.

11. 2. A further distinction relating to demand instruments is evidenced by the difference between the language of this Section and prerevision subsection (3)(c). Under pre-revision subsection (3)(c), it was clear that an

    instrument was overdue, "more than a reasonable time after its issue " (emphasis added). Under current subsection (a)(3), the instrument is overdue when "it has been outstanding for a period of time after its date which is unreasonably long under the circumstances . . . " (emphasis added). The date of the instrument may not be the date of its issue. Under subsection 3-304(a), "issue" means the date of first delivery. The date of the instrument may not be the date of first delivery. Thus, a different result may be obtained under subsection (a)(3) than was obtainable under pre-revision subsection (3)(c).

Laws 1961, SB 36, p. 108, §