Kentucky Revised Statutes

Ky. Rev. Stat. § 355.3-106 (2026)

Unconditional promise or order

✓ current as of May 2026

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(1) Except as provided in this section, for the purposes of KRS 355.3-104(1), a promise or order is unconditional unless it states:

(a) An express condition to payment;

(b) That the promise or order is subject to or governed by another record; or

(c) That rights or obligations with respect to the promise or order are stated in another record. A reference to another record does not of itself make the promise or order conditional.

(2) A promise or order is not made conditional:

(a) By a reference to another record for a statement of rights with respect to collateral, prepayment, or acceleration; or

(b) 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 KRS 355.3- 104(1). 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 KRS 355.3-104(1); but if the promise or order is an instrument, there cannot be a holder in due course of the instrument. Effective: July 12, 2006 History: Amended 2006 Ky. Acts ch. 242, sec. 34, effective July 12, 2006. -- Repealed and reenacted 1996 Ky. Acts ch. 130, sec. 6, effective January 1, 1997. -- Amended 1990 Ky. Acts ch. 478, sec. 1, effective July 13, 1990. -- Amended 1964 Ky. Acts ch. 130, secs. 24 and 25, effective July 1, 1964. -- Created 1958 Ky. Acts ch. 77, sec. 3-106.

Notes of Decisions

Cited in 7 cases (2 in the last 5 years), 1980–2026 · leading case: Amberboy v. Societe De Banque Privee, 831 S.W.2d 793 (Tex. 1992).

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Amberboy v. Societe De Banque Privee, 831 S.W.2d 793 (Tex. 1992). · cites it 2× “1992); Ky.Rev.Stat.Ann. § 355.3-106(2) (Michie/Bobbs-Merrill Supp.”

Riley v. West Kentucky Prod. Credit Ass'n, 603 S.W.2d 916 (Ky. Ct. App. 1980). “Appellees contend, however, that this action was not only to enforce a mortgage, but also to enforce a security agreement on personal property, and that KRS 355.9-504(l)(a) expressly authorizes the allowance of attorneys’ fees.”

Duff v. Bank of Louisville & Trust Co., 705 S.W.2d 920 (Ky. 1986). “In cases where the fee was disallowed, the courts uniformly held them to be unenforceable as against public policy, including attempts to collect the fee under KRS 355.3-106 (1964). Mammoth Cave Prod. Credit Ass’n.”

Ronny L. Stamper v. Cmty. Fin. Servs. Bank, F/D/B/A Bank of Benton (Ky. 2019). · cites it 4× “KRS 355.3-106(1) defines an unconditional promise or order.”

Cmty. Fin. Servs. Bank F/D/B/A Bank of Benton v. Ronny L. Stamper (Ky. 2019). · cites it 4× “KRS 355.3-106(1) defines an unconditional promise or order.”

Nutrien Ag Solutions, Inc., Successor to Sec. v. Duvall (Bankr. W.D. Ky. 2021). “KRS 355.3-106 required The Peoples Bank to pay both payees listed on the check.”

Paige McKee v. Markus Resing (Ky. Ct. App. 2026). “See KRS 355.3-106(1)(a). Because the October 12, 2010, agreement is not a negotiable instrument, Article 3 of the UCC, as adopted in Kentucky, was never applicable in this case.”

— Ky. Rev. Stat. § 355.3-106(1) — 2 cases

Ronny L. Stamper v. Cmty. Fin. Servs. Bank, F/D/B/A Bank of Benton (Ky. 2019). “KRS 355.3-106(1) defines an unconditional promise or order.”

Cmty. Fin. Servs. Bank F/D/B/A Bank of Benton v. Ronny L. Stamper (Ky. 2019). “KRS 355.3-106(1) defines an unconditional promise or order.”

— Ky. Rev. Stat. § 355.3-106(1)(a) — 1 case

— Ky. Rev. Stat. § 355.3-106(2) — 3 cases

Amberboy v. Societe De Banque Privee, 831 S.W.2d 793 (Tex. 1992). “1992); Ky.Rev.Stat.Ann. § 355.3-106(2) (Michie/Bobbs-Merrill Supp.”

Ronny L. Stamper v. Cmty. Fin. Servs. Bank, F/D/B/A Bank of Benton (Ky. 2019). “KRS 355.3-106(1) defines an unconditional promise or order.”

Cmty. Fin. Servs. Bank F/D/B/A Bank of Benton v. Ronny L. Stamper (Ky. 2019). “KRS 355.3-106(1) defines an unconditional promise or order.”

— Ky. Rev. Stat. § 355.3-106(l)(c) — 2 cases

Ronny L. Stamper v. Cmty. Fin. Servs. Bank, F/D/B/A Bank of Benton (Ky. 2019). “KRS 355.3-106(1) defines an unconditional promise or order.”

Cmty. Fin. Servs. Bank F/D/B/A Bank of Benton v. Ronny L. Stamper (Ky. 2019). “KRS 355.3-106(1) defines an unconditional promise or order.”

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