CO Code § 4-1-202 (2021)
2021 Colorado Code|Title 4 - Uniform Commercial Code|Article 1 - General Provisions|Part 2 - General Definitions and Principles of Interpretation|§ 4-1-202. Notice - Knowledge

  Subject to subsection (f) of this section, a person has “notice” of a fact if the person:   Has actual knowledge of it;    Has received a notice or notification of it; or    From all the facts and circumstances known to the person at the time in question, has reason to know that it exists.       “Knowledge” means actual knowledge.    “Discover”, “learn”, or words of similar import refer to knowledge rather than to notice.    A person “notifies” or “gives” a notice or notification to another by taking such steps as may be reasonably required to inform the other in ordinary course, whether or not the other person actually comes to know of it.    Subject to subsection (f) of this section, a person “receives” a notice or notification when:   It comes to that person's attention; or    It is duly delivered in a form reasonable under the circumstances at the place of business through which the contract was made or at another location held out by that person as the place for receipt of such communications.       Notice, knowledge, or a notice or notification received by an organization is effective for a particular transaction from the time it is brought to the attention of the individual conducting that transaction and, in any event, from the time it would have been brought to the individual's attention if the organization had exercised due diligence. An organization exercises due diligence if it maintains reasonable routines for communicating significant information to the person conducting the transaction and there is reasonable compliance with the routines. Due diligence does not require an individual acting for the organization to communicate information unless the communication is part of the individual's regular duties or the individual has reason to know of the transaction and that the transaction would be materially affected by the information.     History. Source: L. 2006: Entire article R&RE, p. 463, § 1, effective September 1.    Editor's note:   This section is similar to former § 4-1-201 (25) to (27) as it existed prior to 2006.   OFFICIAL COMMENT   Source: Derived from former Sections 1-201(25)-(27).   Changes from former law: These provisions are substantive rather than purely definitional. Accordingly, they have been relocated from Section 1-201 to this Section.   1. Under subsection (a), a person has notice when, inter alia, the person has received a notification of the fact in question. The subsection leaves open the time and circumstances under which notice or notification may cease to be effective. Therefore such cases as Graham v. White-Phillips Co., 296 U.S. 27, 56 S. Ct. 21, 80 L. Ed. 20 , are not overruled.   2. As shown in subsection (d), the word “notifies” used when the essential fact is the proper dispatch of the notice, not its receipt. Compare “Send.” When the essential fact is the other party's receipt of the notice, that is stated. Subsection (e) states when a notification is received.   3. Subsection (f) makes clear that reason to know, knowledge, or a notification, although “received” for instance by a clerk in Department A of an organization, is effective for a transaction conducted in Department B only from the time when it was or should have been communicated to the individual conducting that transaction.   ANNOTATION   Annotator's note. Since § 4-1-202 is similar to § 4-1-201 (25) , (26), and (27) as they existed prior to the 2006 repeal and reenactment of this article, relevant cases construing those provisions have been included in the annotations to this section.   There is no actual notice of the unauthorized issuance of stock certificates where it does not appear that one was aware of the provision in the Colorado law requiring that certificates issued with facsimile signatures of the president and the secretary be countersigned by a transfer agent when the certificates do not contain a statement that they are void unless countersigned by a transfer agent and it does not appear that there were facts or circumstances known which would have put one on notice of illegality issue or of the deficiency arising from the failure of the transfer agent to countersign them. Dempsey-Tegeler & Co. v. Otis Oil & Gas Corp., 293 F. Supp. 1383 (D. Colo. 1968 ).   Tests other than “actual knowledge” may be used in resolving the issue of whether an endorsee of a promissory note is a holder in due course, including whether the holder had in his possession facts from which he had reason to know of the defenses “at the time in question”. The critical time for such notice is when the party comes into possession of the note as a holder. Salter v. Vanotti, 42 Colo. App. 448, 599 P.2d 962 (1979).   Inquiry required. If the purchaser has actual knowledge of facts which would apprise him of possible irregularities some inquiry is required by the notice provisions of the UCC. Salter v. Vanotti, 42 Colo. App. 448, 599 P.2d 962 (1979).   Inquiry not required. Where an instrument is regular on its face there is no duty on the part of a check cashing service to inquire as to possible defenses, unless circumstances of which the holder in due course has knowledge are of such a nature that the failure to inquire reveals a deliberate desire to evade knowledge because of a fear that investigation would disclose the existence of a defense. Money Mart Check Cashing Ctr., Inc. v. Epicycle Corp., 667 P.2d 1372 (Colo. 1983).   Refusal to investigate. The protection afforded a holder in due course cannot be used to shield one who simply refuses to investigate when the facts known to him suggest an irregularity concerning the commercial paper he purchases. Salter v. Vanotti, 42 Colo. App. 448, 599 P.2d 962 (1979).   Patient gave sufficient notice to physician of defective character of product and such notice “came to the attention” of the physician, within the meaning of subsection (26), when patient presented herself to the physician in a life-threatening condition. Palmer v. A.H. Robins Co., Inc., 684 P.2d 187 (Colo. 1984).   Facts not sufficient to constitute notice. The fact that the documents given to subsequent holder referred to a “Deed of Trust” rather than a “Land Sales Agreement” did not give such holder reason to know that the transaction may not have been consummated. Therefore, the subsequent holder did not have knowledge of facts that would give him reason to know of the maker's defense under the Truth in Lending Act. Merchants Mortg. & Trust Corp. v. Dawe, 754 P.2d 418 (Colo. App. 1987).   Record supported the trial court's finding that the bank had no notice of any offset against the promissory note where the note was current in its payments at the time of the transfer, the maker of the note made another payment thereon subsequent to the transfer to the bank, and the note itself did not specify any offset against it. First Nat'l Bank v. Lohman, 827 P.2d 583 (Colo. App. 1992).