Tennessee Code Annotated
Tenn. Code Ann. § 47-3-304 (2026)
Overdue instrument
✓ current as of May 2026
- (a) An instrument payable on demand becomes overdue at the earliest of the following times:
- (1) on the day after the day demand for payment is duly made;
- (2) if the instrument is a check, ninety (90) days after its date; or
- (3) if the instrument is not a check, when the instrument has been outstanding for a period of time after its date which is unreasonably long under the circumstances of the particular case in light of the nature of the instrument and usage of the trade.
- (b) With respect to an instrument payable at a definite time the following rules apply:
- (1) If the principal is payable in installments and a due date has not been accelerated, the instrument becomes overdue upon default under the instrument for nonpayment of an installment, and the instrument remains overdue until the default is cured.
- (2) If the principal is not payable in installments and the due date has not been accelerated, the instrument becomes overdue on the day after the due date.
- (3) If a due date with respect to principal has been accelerated, the instrument becomes overdue on the day after the accelerated due date.
- (c) Unless the due date of principal has been accelerated, an instrument does not become overdue if there is default in payment of interest but no default in payment of principal.
Acts 1995, ch. 397, § 2.
Notes of Decisions
Cited in 5
cases, 1973–2007 · leading case: Lawyers Title Ins. v. United Am. Bank of Memphis, 21 F. Supp. 2d 785 (W.D. Tenn. 1998).
Lawyers Title Ins. v. United Am. Bank of Memphis, 21 F. Supp. 2d 785 (W.D. Tenn. 1998). “The defendant moves to dismiss the claims based on Tenn.Code Ann. § 47-3-304 because Cannon was not a fiduciary vis-á-vis UAB, or, in the alternative, because UAB was not a “purchaser” of checks payable to third parties.”
C-Wood Lumber Co. v. Wayne Cnty. Bank, 233 S.W.3d 263 (Tenn. Ct. App. 2007). “Section 3-304(2) ( Tenn. Code Ann. § 47-3-304 (2)) provided in general terms that the purchaser “has notice of a claim against the instrument when he has knowledge that a fiduciary has negotiated the instrument in payment of or as security for his own debt or in any transaction…”
McConnico v. Third Nat'l Bank in Nashville, 499 S.W.2d 874 (Tenn. 1973). “ While negligence has no reflection on the "good faith" requirement of a holder's status as a holder in due course, except as to such outrageous conduct as may provide relevant evidence to the issue of honesty, it does go to the notice requirement of § 47-3-302(1) as defined by…”
Soloff v. Dollahite, 779 S.W.2d 57 (Tenn. Ct. App. 1989). “See Tenn.Code Ann. § 47-3-304 (1979). Of greatest importance to the question involved in this part of the opinion is subsection (5) of Tenn.”
United Am. Fin. Corp. v. Fin. Interstate Serv. Corp. (In re United Am. Fin. Corp.), 36 B.R. 331 (Bankr. E.D. Tenn. 1984). “Tenn. Code Ann. § 47-3-302 (l)(c) (1979).”
— Tenn. Code Ann. § 47-3-304(1)(a) — 1 case
McConnico v. Third Nat'l Bank in Nashville, 499 S.W.2d 874 (Tenn. 1973). “ While negligence has no reflection on the "good faith" requirement of a holder's status as a holder in due course, except as to such outrageous conduct as may provide relevant evidence to the issue of honesty, it does go to the notice requirement of § 47-3-302(1) as defined by…”
— Tenn. Code Ann. § 47-3-304(2) — 4 cases
McConnico v. Third Nat'l Bank in Nashville, 499 S.W.2d 874 (Tenn. 1973). “ While negligence has no reflection on the "good faith" requirement of a holder's status as a holder in due course, except as to such outrageous conduct as may provide relevant evidence to the issue of honesty, it does go to the notice requirement of § 47-3-302(1) as defined by…”
C-Wood Lumber Co. v. Wayne Cnty. Bank, 233 S.W.3d 263 (Tenn. Ct. App. 2007). “Section 3-304(2) ( Tenn. Code Ann. § 47-3-304 (2)) provided in general terms that the purchaser “has notice of a claim against the instrument when he has knowledge that a fiduciary has negotiated the instrument in payment of or as security for his own debt or in any transaction…”
Lawyers Title Ins. v. United Am. Bank of Memphis, 21 F. Supp. 2d 785 (W.D. Tenn. 1998). “The defendant moves to dismiss the claims based on Tenn.Code Ann. § 47-3-304 because Cannon was not a fiduciary vis-á-vis UAB, or, in the alternative, because UAB was not a “purchaser” of checks payable to third parties.”
Soloff v. Dollahite, 779 S.W.2d 57 (Tenn. Ct. App. 1989). “See Tenn.Code Ann. § 47-3-304 (1979). Of greatest importance to the question involved in this part of the opinion is subsection (5) of Tenn.”
— Tenn. Code Ann. § 47-3-304(4) — 1 case
McConnico v. Third Nat'l Bank in Nashville, 499 S.W.2d 874 (Tenn. 1973). “ While negligence has no reflection on the "good faith" requirement of a holder's status as a holder in due course, except as to such outrageous conduct as may provide relevant evidence to the issue of honesty, it does go to the notice requirement of § 47-3-302(1) as defined by…”
— Tenn. Code Ann. § 47-3-304(4)(e) — 2 cases
C-Wood Lumber Co. v. Wayne Cnty. Bank, 233 S.W.3d 263 (Tenn. Ct. App. 2007). “Section 3-304(2) ( Tenn. Code Ann. § 47-3-304 (2)) provided in general terms that the purchaser “has notice of a claim against the instrument when he has knowledge that a fiduciary has negotiated the instrument in payment of or as security for his own debt or in any transaction…”
McConnico v. Third Nat'l Bank in Nashville, 499 S.W.2d 874 (Tenn. 1973). “ While negligence has no reflection on the "good faith" requirement of a holder's status as a holder in due course, except as to such outrageous conduct as may provide relevant evidence to the issue of honesty, it does go to the notice requirement of § 47-3-302(1) as defined by…”
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