Statutory Overkill: Why Section 3-420(a) of the Uniform Commercial Code May Not Really Mean What It Says About the Issuer's Cause of Action for Conversion of a Negotiable Instrument

Document Type

Article

Publication Date

2007

Abstract

This article looks, first, at some of the ways in which drawers have tried to avoid the prohibition of § 3-420(a), by claiming not to be covered by the prohibition, by attempting to limit the scope of the bar, or by bringing claims on theories of recovery other than conversion. Second, the article explores the question whether the drafters of revised Article 3 may have engaged in a bit of statutory overkill when they ruled out all conversion actions by issuers and argues that certain conversion claims, which the issuer of an instrument has historically been able to maintain, should still be viable today, notwithstanding the (apparent) blanket prohibition of § 3-420(a).

Comments

Originally published by the UCC Law Journal in 2007.

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