Discuss the effect on an instrument of: (a) contradictory amounts between the numerals and amount written in words on a check; (b) the interest rate left blank on a promissory note; and (c) contradictory terms that are typed onto a promissory note and terms that are preprinted on the note form
Rather than invalidating the defective documents, the UCC favors negotiability and provides rules to resolve uncertainty and supply missing terms. In situation (a), where terms in a negotiable instrument contradict each other, words take precedence over numbers. In situation (b), UCC Section 3-112 provides that the judgment rate applies. The judgment rate is the rate that courts use on court-ordered judgments. In situation (c), terms typed by the parties are controlling over preprinted terms on a form. In the case of contradictory terms, the UCC tries to give effect to the term least likely to contain the mistake.
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