§ 41-03-06 — (3-106) Unconditional promise or order

1. Except as provided in this section, for the purposes of subsection 1 of section
41-03-04, a promise or order is unconditional unless it states an express condition to
payment or states that the promise or order is subject to or governed by another
writing or that rights or obligations with respect to the promise or order are stated in
another writing. A mere reference to another writing does not make the promise or
order conditional.
2. A promise or order is not made conditional by a reference to another writing for a
statement of rights with respect to collateral, prepayment, or accelerating or because
payment is limited to resort to a particular fund or source.
3. If a promise or order requires as a condition to payment a countersignature by a
person whose specimen signature appears on the promise or order, the condition does
not make the promise or order conditional for the purposes of subsection 1 of section
41-03-04. If the person whose specimen signature appears on an instrument fails to
countersign the instrument, the failure to countersign is a defense to the obligation of
the issuer, but the failure does not prevent a transferee of the instrument from
becoming a holder of the instrument.
4. If a promise or order at the time it is issued or first comes into possession of a holder
contains a statement, required by applicable statutory or administrative law, to the
effect that the rights of a holder or transferee are subject to claims or defenses that the
issuer could assert against the original payee, the promise or order is not thereby
made conditional for the purposes of subsection 1 of section 41-03-04, but if the
promise or order is an instrument, there cannot be a holder in due course of the
instrument.