§ 4-8-203 — Staleness as notice of defect or defense

After an act or event,
other than a call that has been revoked, creating a right to immediate performance
of the principal obligation represented by a certificated security or setting a date
on or after which the security is to be presented or surrendered for redemption or
exchange, a purchaser is charged with notice of any defect in its issue or defense of
the issuer, if the act or event:

(1) Requires the payment of money, the delivery of a certificated security, the
registration of transfer of an uncertificated security, or any of them on presentation
or surrender of the security certificate, the money or security is available on the
date set for payment or exchange, and the purchaser takes the security more than
one year after that date; or

(2) Is not covered by paragraph (1) of this section and the purchaser takes
the security more than two years after the date set for surrender or presentation or
the date on which performance became due.

Legislative History

Source: L. 96: Entire article R&RE, p. 217, � 2, effective July 1.