Indiana § 26-1-3.1-414 Obligation of drawer

Indiana Statutes

§ 26-1-3.1-414 — Obligation of drawer

Indiana § 26-1-3.1-414

Title 26COMMERCIAL LAW

Art. 1UNIFORM COMMERCIAL CODE

Ch. 3.1Negotiable Instruments

This text of Indiana § 26-1-3.1-414 (Obligation of drawer) is published on Counsel Stack Legal Research, covering Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Ind. Code § 26-1-3.1-414 (2026).

Text

(a)This section does not apply to cashier's checks or other drafts drawn on the drawer.

(b)If an unaccepted draft is dishonored, the drawer is obliged to pay the draft:

(1)according to its terms at the time it was issued or, if not issued, at the time it first came into possession of a holder; or

(2)if the drawer signed an incomplete instrument, according to its terms when completed, to the extent stated in IC 26-1-3.1-115 and IC 26-1-3.1-407. The obligation is owed to a person entitled to enforce the draft or to an endorser who paid the draft under IC 26-1-3.1-415.

(c)If a draft is accepted by a bank, the drawer is discharged, regardless of when or by whom acceptance was obtained.

(d)If a draft is accepted and the acceptor is not a bank, the obligation of the drawer to pay the draft

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(a) This section does not apply to
cashier's checks or other drafts drawn on the drawer.
(b) If an unaccepted draft is dishonored, the drawer is obliged to pay
the draft:
(1) according to its terms at the time it was issued or, if not
issued, at the time it first came into possession of a holder; or
(2) if the drawer signed an incomplete instrument, according to its
terms when completed, to the extent stated in IC 26-1-3.1-115 and
IC 26-1-3.1-407.
The obligation is owed to a person entitled to enforce the draft or to an
endorser who paid the draft under IC 26-1-3.1-415.
(c) If a draft is accepted by a bank, the drawer is discharged,
regardless of when or by whom acceptance was obtained.
(d) If a draft is accepted and the acceptor is not a bank, the
obligation of the drawer to pay the draft if the draft is dishonored by the
acceptor is the same as the obligation of an endorser under IC 26-1-3.1-415(a) and (c).
(e) If a draft states that it is drawn "without recourse" or otherwise
disclaims liability of the drawer to pay the draft, the drawer is not liable
under subsection (b) to pay the draft if the draft is not a check. A
disclaimer of the liability stated in subsection (b) is not effective if the
draft is a check.
(f) If:
(1) a check is not presented for payment or given to a depositary
bank for collection within thirty (30) days after its date;
(2) the drawee suspends payments after expiration of the thirty
(30) day period without paying the check; and
(3) because of the suspension of payments, the drawer is deprived
of funds maintained with the drawee to cover payment of the
check;
the drawer to the extent deprived of funds may discharge its obligation
to pay the check by assigning to the person entitled to enforce the
check the rights of the drawer against the drawee with respect to the
funds.