Ohio Revised Code

Ohio Rev. Code § 1303.23 (2026)

Negotiation subject to rescission - UCC 3-202

✓ current as of May 2026
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(A) Negotiation is effective even if it is obtained in any of the following manners:

(1) From an infant, a corporation exceeding its powers, or any other person without capacity;

(2) By fraud, duress, or mistake of any kind;

(3) As part of an illegal transaction;

(4) In breach of duty.

(B) To the extent permitted by other law, negotiation may be rescinded or may be subject to other remedies, but those remedies may not be asserted against a subsequent holder in due course or a person paying the instrument in good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 the rescission or other remedy.

Notes of Decisions
Cited in 16 cases, 1983–2020 · leading case: All Am. Fin. Co. v. Pugh Shows, Inc., 507 N.E.2d 1134 (Ohio 1987).
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All Am. Fin. Co. v. Pugh Shows, Inc., 507 N.E.2d 1134 (Ohio 1987). · cites it 6× “2 ' The requirements for negotiation are governed by R.C. 1303.23 (UCC 3-202), which provides in pertinent part: “(A) Negotiation is the transfer of an instrument in such form that the transferee becomes a holder.”
Morris v. Ohio Cas. Ins., 517 N.E.2d 904 (Ohio 1988). “Further, title does not pass in such a situation because “* * * the transferee who takes under the thief’s forged indorsement cannot qualify as a holder because section 3-202(2) [R.C. 1303.23(B)] says that ‘[a]n indorsement must be written by or on behalf of the holder.”
Chute v. Bank One of Akron, N.A., 460 N.E.2d 720 (Ohio Ct. App. 1983). · cites it 2× “26 provides, in part: “(A) A customer may by order to his bank stop payment of any item payable for his account but the order must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it prior to any action by the bank with respect…”
Alves v. Baldaia, 470 N.E.2d 459 (Ohio Ct. App. 1984). · cites it 3× “See, also, R.C. 1303.23(A) (UCC 3-202[l]), which states that “* * * [i]f the instrument is payable to order it is negotiated by delivery with any necessary indorsement * * *” (emphasis added); and Lewis v.”
Fed. Land Bank v. Taggart, 508 N.E.2d 152 (Ohio 1987). “Consequently, the promissory note is a negotiable instrument and appellant is a holder in due course, satisfying R.C. 1303.23 (UCC 3-202), all requirements of R.”
Moyer v. Abbey Credit Union, Inc., 2020 Ohio 5410 (Ohio Ct. App. 2020). · cites it 2× “28, this statute was repealed in 1994 and was amended and recodified as R.C. 1303.23. See Amendment Note to R.C. 1303.”
Golden Years Nursing Home (No. 2), Inc. v. Gabbard, 640 N.E.2d 1186 (Ohio Ct. App. 1994). · cites it 2× “R.C. 1303.23(A); White & Summers, Uniform Commercial Code (3 Ed.”
Milstein v. Ne. Ohio Harness, 507 N.E.2d 459 (Ohio Ct. App. 1986). · cites it 2× “” This argument rests on the theory the notes were not negotiated in a manner consistent with R.C. 1303.23. 1 We do not see the basis for this assertion.”
Soc'y Nat'l Bank v. Sec. Fed. Sav. & Loan, 71 Ohio St. 3d 321 (Ohio 1994). “A deposit slip, which is neither attached to nor incorporated into the check itself, does not constitute an allonge, nor can a writing contained on a deposit slip serve as a restrictive indorsement, or a modification of a restrictive indorsement.”
Ohio Bell Tel. Co. v. BancOhio Nat'l Bank, 499 N.E.2d 327 (Ohio Ct. App. 1985). “Concededly, it is in the best interest of the receiving banks to obtain the payee’s endorsement because the effect of no endorsement is to prevent negotiation of the check (R.C. 1303.23 [UCC 3-202]), to deny holder status to subsequent possessors of the check (R.”
Brown v. Fifth Third Bank, 460 N.E.2d 739 (Ohio Ct. App. 1983). “Presentation (or presentment) of an unnegotiated check calls merely for payment of the check.”
Fifth Third Bank v. Lilly, 552 N.E.2d 962 (Ohio Ct. App. 1988). “R.C. 1303.23 (UCC 3-202) explains that: “(A) Negotiation is the transfer of an instrument in such form that the transferee becomes a holder.”
Show all 16 citing cases →
— Ohio Rev. Code § 1303.23(A) — 5 cases
Alves v. Baldaia, 470 N.E.2d 459 (Ohio Ct. App. 1984). “See, also, R.C. 1303.23(A) (UCC 3-202[l]), which states that “* * * [i]f the instrument is payable to order it is negotiated by delivery with any necessary indorsement * * *” (emphasis added); and Lewis v.”
Golden Years Nursing Home (No. 2), Inc. v. Gabbard, 640 N.E.2d 1186 (Ohio Ct. App. 1994). “R.C. 1303.23(A); White & Summers, Uniform Commercial Code (3 Ed.”
Brown v. Fifth Third Bank, 460 N.E.2d 739 (Ohio Ct. App. 1983). “Presentation (or presentment) of an unnegotiated check calls merely for payment of the check.”
Nicola v. Burnette, 499 N.E.2d 368 (Ohio Ct. App. 1985).
Golden Years Nursing Home, Inc. v. Gabbard, 682 N.E.2d 731 (Ohio Ct. App. 1996).
— Ohio Rev. Code § 1303.23(B) — 4 cases
Morris v. Ohio Cas. Ins., 517 N.E.2d 904 (Ohio 1988). “Further, title does not pass in such a situation because “* * * the transferee who takes under the thief’s forged indorsement cannot qualify as a holder because section 3-202(2) [R.C. 1303.23(B)] says that ‘[a]n indorsement must be written by or on behalf of the holder.”
Soc'y Nat'l Bank v. Sec. Fed. Sav. & Loan, 71 Ohio St. 3d 321 (Ohio 1994). “A deposit slip, which is neither attached to nor incorporated into the check itself, does not constitute an allonge, nor can a writing contained on a deposit slip serve as a restrictive indorsement, or a modification of a restrictive indorsement.”
Golden Years Nursing Home (No. 2), Inc. v. Gabbard, 640 N.E.2d 1186 (Ohio Ct. App. 1994). “R.C. 1303.23(A); White & Summers, Uniform Commercial Code (3 Ed.”
Soc'y Natl. Bank v. Sec. Fed. S.& L., 1994 Ohio 152 (Ohio 1994).
— Ohio Rev. Code § 1303.23(C) — 1 case
All Am. Fin. Co. v. Pugh Shows, Inc., 507 N.E.2d 1134 (Ohio 1987). “2 ' The requirements for negotiation are governed by R.C. 1303.23 (UCC 3-202), which provides in pertinent part: “(A) Negotiation is the transfer of an instrument in such form that the transferee becomes a holder.”
— Ohio Rev. Code § 1303.23(D) — 2 cases
All Am. Fin. Co. v. Pugh Shows, Inc., 507 N.E.2d 1134 (Ohio 1987). “2 ' The requirements for negotiation are governed by R.C. 1303.23 (UCC 3-202), which provides in pertinent part: “(A) Negotiation is the transfer of an instrument in such form that the transferee becomes a holder.”
Alves v. Baldaia, 470 N.E.2d 459 (Ohio Ct. App. 1984). “See, also, R.C. 1303.23(A) (UCC 3-202[l]), which states that “* * * [i]f the instrument is payable to order it is negotiated by delivery with any necessary indorsement * * *” (emphasis added); and Lewis v.”
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