N.Y. Uniform Commercial Code Law Section 3-306
Rights of One Not Holder in Due Course

Section 3--306. Rights of One Not Holder in Due Course. Unless he has the rights of a holder in due course any person takes the instrument subject to (a) all valid claims to it on the part of any person; and

(b)

all defenses of any party which would be available in an action on a simple contract; and

(c)

the defenses of want or failure of consideration, non-performance of any condition precedent, non-delivery, or delivery for a special purpose (Section 3--408); and

(d)

the defense that he or a person through whom he holds the instrument acquired it by theft, or that payment or satisfaction to such holder would be inconsistent with the terms of a restrictive indorsement. The claim of any third person to the instrument is not otherwise available as a defense to any party liable thereon unless the third person himself defends the action for such party.

Source: Section 3-306 — Rights of One Not Holder in Due Course, https://www.­nysenate.­gov/legislation/laws/UCC/3-306 (updated Sep. 22, 2014; accessed Nov. 29, 2025).

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Verified:
Nov. 29, 2025

Last modified:
Sep. 22, 2014

§ 3-306. Rights of One Not Holder in Due Course's source at nysenate​.gov

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