Mich. Comp. Laws » Michigan Compiled Laws / Chapter 440 / Act 174 of 1962
Michigan Compiled Laws

Mich. Comp. Laws § 440.3202 (2026)

Negotiation; effective although subject to rescission or other remedies.

✓ current as of July 2026
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UNIFORM COMMERCIAL CODE


Act 174 of 1962


440.3202 Negotiation; effective although subject to rescission or other remedies.

Sec. 3202.

    (1)  Negotiation is effective even if obtained (i) from an infant, a corporation exceeding its powers, or a person without capacity, (ii) by fraud, duress, or mistake, or (iii) in breach of duty or as part of an illegal transaction.

    (2) To the extent permitted by other law, negotiation may be rescinded or may be subject to other remedies, but those remedies may not be asserted against a subsequent holder in due course or a person paying the instrument in good faith and without knowledge of facts that are a basis for rescission or other remedy.

History: 1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993

Notes of Decisions
Cited in 5 cases, 1974–2010 · leading case: Livonia Prop. Holdings, L.L.C. v. 12840-12976 Farmington Road Holdings, L.L.C., 717 F. Supp. 2d 724 (E.D. Mich. 2010).
Sort: Relevance Newest Treatment
Livonia Prop. Holdings, L.L.C. v. 12840-12976 Farmington Road Holdings, L.L.C., 717 F. Supp. 2d 724 (E.D. Mich. 2010). “§ 440.3202, required an allonge to be “so firmly affixed [to the Note] as to become a part thereof.”
Dep't of Treasury v. Bank of Commonwealth, 314 N.W.2d 688 (Mich. Ct. App. 1981). “1201(14), MCL 440.3202(1); MSA 19.3202(1). Also, the bank’s duties to the state as drawer of the check were not yet in effect because the state was not yet the holder, MCL 440.”
Michigan Ins. Repair Co. v. Mfrs. Nat'l Bank, 487 N.W.2d 517 (Mich. Ct. App. 1992). “MCL 440.3202(2); MSA 19.3202(2) provides that "[a]n indorsement must be written by or on behalf of the holder.”
Melick v. Nauman Vandervoort, Inc., 220 N.W.2d 748 (Mich. Ct. App. 1974). “MCLA 440.3202; MSA 19.3202. Moreover, their attorneys’ certification of the checks discharged the defendant from liability for the amounts thereof and éffectively transferred the funds from defendant.”
Henderson Glass, Inc. v. Remes Glass, Inc. (In Re Remes Glass, Inc.), 136 B.R. 132 (Bankr. W.D. Mich. 1992). “-1201(14); MCL 440.3202(1); MSA 19.-3202(1). Also, the bank’s duties to the state as drawer of the check were not yet in effect because the state was not yet the holder, MCL 400.”
— Mich. Comp. Laws § 440.3202(1) — 2 cases
Dep't of Treasury v. Bank of Commonwealth, 314 N.W.2d 688 (Mich. Ct. App. 1981). “1201(14), MCL 440.3202(1); MSA 19.3202(1). Also, the bank’s duties to the state as drawer of the check were not yet in effect because the state was not yet the holder, MCL 440.”
Henderson Glass, Inc. v. Remes Glass, Inc. (In Re Remes Glass, Inc.), 136 B.R. 132 (Bankr. W.D. Mich. 1992). “-1201(14); MCL 440.3202(1); MSA 19.-3202(1). Also, the bank’s duties to the state as drawer of the check were not yet in effect because the state was not yet the holder, MCL 400.”
— Mich. Comp. Laws § 440.3202(2) — 1 case
Michigan Ins. Repair Co. v. Mfrs. Nat'l Bank, 487 N.W.2d 517 (Mich. Ct. App. 1992). “MCL 440.3202(2); MSA 19.3202(2) provides that "[a]n indorsement must be written by or on behalf of the holder.”
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