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2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—516. Effect of acceptance of goods; notice of default; burden of establishing default after acceptance; notice of claim or litigation to person answerable over

§ 2A—516. Effect of acceptance of goods; notice of default; burden of establishing default after acceptance; notice of claim or litigation to person answerable over
(1) A lessee must pay rent for any goods accepted in accordance with the lease contract, with due allowance for goods rightfully rejected or not delivered.
(2) A lessee’s acceptance of goods precludes rejection of the goods accepted. In the case of a finance lease, if made with knowledge of a nonconformity, acceptance cannot be revoked because of it. In any other case, if made with knowledge of a nonconformity, acceptance cannot be revoked because of it unless the acceptance was on the reasonable assumption that the nonconformity would be seasonably cured. Acceptance does not of itself impair any other remedy provided by this article or the lease agreement for nonconformity.
(3) If a tender has been accepted:
(a) within a reasonable time after the lessee discovers or should have discovered any default, the lessee shall notify the lessor and the supplier, if any, or be barred from any remedy against the party not notified;
(b) except in the case of a consumer lease, within a reasonable time after the lessee receives notice of litigation for infringement or the like (§ 2A—211) the lessee shall notify the lessor or be barred from any remedy over for liability established by the litigation; and
(c) the burden is on the lessee to establish any default.
(4) If a lessee is sued for breach of a warranty or other obligation for which a lessor or a supplier is answerable over the following apply:
(a) The lessee may give the lessor or the supplier, or both, written notice of the litigation. If the notice states that the person notified may come in and defend and that if the person notified does not do so that person will be bound in any action against that person by the lessee by any determination of fact common to the two litigations, then unless the person notified after seasonable receipt of the notice does come in and defend that person is so bound.
(b) The lessor or the supplier may demand in writing that the lessee turn over control of the litigation including settlement if the claim is one for infringement or the like (§ 2A—211) or else be barred from any remedy over. If the demand states that the lessor or the supplier agrees to bear all expense and to satisfy any adverse judgment, then unless the lessee after seasonable receipt of the demand does turn over control the lessee is so barred.
(5) Subsections (3) and (4) of this section apply to any obligation of a lessee to hold the lessor or the supplier harmless against infringement or the like (§ 2A—211). (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—517. Revocation of acceptance of goods

§ 2A—517. Revocation of acceptance of goods
(1) A lessee may revoke acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to the lessee if the lessee has accepted it:
(a) except in the case of a finance lease, on the reasonable assumption that its nonconformity would be cured and it has not been seasonably cured; or
(b) without discovery of the nonconformity if the lessee’s acceptance was reasonably induced either by the lessor’s assurances or, except in the case of a finance lease, by the difficulty of discovery before acceptance.
(2) Except in the case of a finance lease that is not a consumer lease, a lessee may revoke acceptance of a lot or commercial unit if the lessor defaults under the lease contract and the default substantially impairs the value of that lot or commercial unit to the lessee.
(3) If the lease agreement so provides, the lessee may revoke acceptance of a lot or commercial unit because of other defaults by the lessor.
(4) Revocation of acceptance must occur within a reasonable time after the lessee discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by the nonconformity. Revocation is not effective until the lessee notifies the lessor.
(5) A lessee who so revokes has the same rights and duties with regard to the goods involved as if the lessee had rejected them. (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—518. Cover; substitute goods

§ 2A—518. Cover; substitute goods
(1) After a default by a lessor under the lease contract of the type described in section 2A—508(1) of this title, or, if agreed, after other default by the lessor, the lessee may cover by making any purchase or lease of or contract to purchase or lease goods in substitution for those due from the lessor.
(2) Except as otherwise provided with respect to damages liquidated in the lease agreement (§ 2A—504) or otherwise determined pursuant to agreement of the parties (§§ 1—302 and 2A—503), if a lessee’s cover is by a lease agreement substantially similar to the original lease agreement and the new lease agreement is made in good faith and in a commercially reasonable manner, the lessee may recover from the lessor as damages
(i) the present value, as of the date of the commencement of the term of the new lease agreement, of the rent under the new lease agreement applicable to that period of the new lease term which is comparable to the then remaining term of the original lease agreement minus the present value as of the same date of the total rent for the then remaining lease term of the original lease agreement, and
(ii) any incidental or consequential damages, less expenses saved in consequence of the lessor’s default.
(3) If a lessee’s cover is by lease agreement that for any reason does not qualify for treatment under subsection (2) of this section, or is by purchase or otherwise, the lessee may recover from the lessor as if the lessee had elected not to cover and section 2A—519 of this title governs. (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995; amended 2007, No. 99 (Adj. Sess.), § 7.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—519. Lessee’s damages for non-delivery, repudiation, default, and breach of warranty in regard to accepted goods

§ 2A—519. Lessee’s damages for non-delivery, repudiation, default, and breach of warranty in regard to accepted goods
(1) Except as otherwise provided with respect to damages liquidated in the lease agreement (§ 2A—504) or otherwise determined pursuant to agreement of the parties (§§ 1—302 and 2A—503), if a lessee elects not to cover or a lessee elects to cover and the cover is by lease agreement that for any reason does not qualify for treatment under section 2A—518(2) of this title, or is by purchase or otherwise, the measure of damages for non-delivery or repudiation by the lessor or for rejection or revocation of acceptance by the lessee is the present value, as of the date of the default, of the then market rent minus the present value as of the same date of the original rent, computed for the remaining lease term of the original lease agreement, together with incidental and consequential damages, less expenses saved in consequence of the lessor’s default.
(2) Market rent is to be determined as of the place for tender or, in cases of rejection after arrival or revocation of acceptance, as of the place of arrival.
(3) Except as otherwise agreed, if the lessee has accepted goods and given notification (§ 2A—516(3)), the measure of damages for nonconforming tender or delivery or other default by a lessor is the loss resulting in the ordinary course of events from the lessor’s default as determined in any manner that is reasonable together with incidental and consequential damages, less expenses saved in consequence of the lessor’s default.
(4) Except as otherwise agreed, the measure of damages for breach of warranty is the present value at the time and place of acceptance of the difference between the value of the use of the goods accepted and the value if they had been as warranted for the lease term, unless special circumstances show proximate damages of a different amount, together with incidental and consequential damages, less expenses saved in consequence of the lessor’s default or breach of warranty. (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995; amended 2007, No. 99 (Adj. Sess.), § 8.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—520. Lessee’s incidental and consequential damages

§ 2A—520. Lessee’s incidental and consequential damages
(1) Incidental damages resulting from a lessor’s default include expenses reasonably incurred in inspection, receipt, transportation, and care and custody of goods rightfully rejected or goods the acceptance of which is justifiably revoked, any commercially reasonable charges, expenses or commissions in connection with effecting cover, and any other reasonable expense incident to the default.
(2) Consequential damages resulting from a lessor’s default include:
(a) any loss resulting from general or particular requirements and needs of which the lessor at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise; and
(b) injury to person or property proximately resulting from any breach of warranty. (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—521. Lessee’s right to specific performance or replevin

§ 2A—521. Lessee’s right to specific performance or replevin
(1) Specific performance may be decreed if the goods are unique or in other proper circumstances.
(2) A decree for specific performance may include any terms and conditions as to payment of the rent, damages, or other relief that the court deems just.
(3) A lessee has a right of replevin, detinue, sequestration, claim and delivery, or the like for goods identified to the lease contract if after reasonable effort the lessee is unable to effect cover for those goods or the circumstances reasonably indicate that the effort will be unavailing. (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—522. Lessee’s right to goods on lessor’s insolvency

§ 2A—522. Lessee’s right to goods on lessor’s insolvency
(1) Subject to subsection (2) of this section and even though the goods have not been shipped, a lessee who has paid a part or all of the rent and security for goods identified to a lease contract (§ 2A-217) on making and keeping good a tender of any unpaid portion of the rent and security due under the lease contract may recover the goods identified from the lessor if the lessor becomes insolvent within 10 days after receipt of the first installment of rent and security.
(2) A lessee acquires the right to recover goods identified to a lease contract only if they conform to the lease contract. (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—523. Lessor’s remedies

§ 2A—523. Lessor’s remedies
(1) If a lessee wrongfully rejects or revokes acceptance of goods or fails to make a payment when due or repudiates with respect to a part or the whole, then, with respect to any goods involved, and with respect to all of the goods if under an installment lease contract the value of the whole lease contract is substantially impaired (§ 2A—510), the lessee is in default under the lease contract and the lessor may:
(a) cancel the lease contract (§ 2A—505(1));
(b) proceed respecting goods not identified to the lease contract (§ 2A—524);
(c) withhold delivery of the goods and take possession of goods previously delivered (§ 2A—525);
(d) stop delivery of the goods by any bailee (§ 2A—526);
(e) dispose of the goods and recover damages (§ 2A—527), or retain the goods and recover damages (§ 2A—528), or in a proper case recover rent (§ 2A—529); and
(f) exercise any other rights or pursue any other remedies provided in the lease contract.
(2) If a lessor does not fully exercise a right or obtain a remedy to which the lessor is entitled under subsection (1) of this section, the lessor may recover the loss resulting in the ordinary course of events from the lessee’s default as determined in any reasonable manner, together with incidental damages, less expenses saved in consequence of the lessee’s default.
(3) If a lessee is otherwise in default under a lease contract, the lessor may exercise the rights and pursue the remedies provided in the lease contract, which may include a right to cancel the lease. In addition, unless otherwise provided in the lease contract:
(a) if the default substantially impairs the value of the lease contract to the lessor, the lessor may exercise the rights and pursue the remedies provided in subsection (1) or (2) of this section; or
(b) if the default does not substantially impair the value of the lease contract to the lessor, the lessor may recover as provided in subsection (2) of this section. (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—524. Lessor’s right to identify goods to lease contract

§ 2A—524. Lessor’s right to identify goods to lease contract
(1) After default by the lessee under the lease contract of the type described in section 2A—523(1) or 2A—523(3)(a) of this title or, if agreed, after other default by the lessee, the lessor may:
(a) identify to the lease contract conforming goods not already identified if at the time the lessor learned of the default they were in the lessor’s or the supplier’s possession or control; and
(b) dispose of goods (§ 2A—527(1)) that demonstrably have been intended for the particular lease contract even though those goods are unfinished.
(2) If the goods are unfinished, in the exercise of reasonable commercial judgment for the purposes of avoiding loss and of effective realization, an aggrieved lessor or the supplier may either complete manufacture and wholly identify the goods to the lease contract or cease manufacture and lease, sell, or otherwise dispose of the goods for scrap or salvage value or proceed in any other reasonable manner. (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—525. Lessor’s right to possession of goods

§ 2A—525. Lessor’s right to possession of goods
(1) If a lessor discovers the lessee to be insolvent, the lessor may refuse to deliver the goods.
(2) After a default by the lessee under the lease contract of the type described in section 2A—523(1) or 2A—523(3)(a) of this title or, if agreed, after other default by the lessee, the lessor has the right to take possession of the goods. If the lease contract so provides, the lessor may require the lessee to assemble the goods and make them available to the lessor at a place to be designated by the lessor which is reasonably convenient to both parties. Without removal, the lessor may render unusable any goods employed in trade or business, and may dispose of goods on the lessee’s premises (§ 2A—527).
(3) The lessor may proceed under subsection (2) without judicial process if it can be done without breach of the peace or the lessor may proceed by action. (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—526. Lessor’s stoppage of delivery in transit or otherwise

§ 2A—526. Lessor’s stoppage of delivery in transit or otherwise
(1) A lessor may stop delivery of goods in the possession of a carrier or other bailee if the lessor discovers the lessee to be insolvent and may stop delivery of carload, truckload, planeload, or larger shipments of express or freight if the lessee repudiates or fails to make a payment due before delivery, whether for rent, security or otherwise under the lease contract, or for any other reason the lessor has a right to withhold or take possession of the goods.
(2) In pursuing its remedies under subsection (1) of this section, the lessor may stop delivery until:
(a) receipt of the goods by the lessee;
(b) acknowledgment to the lessee by any bailee of the goods, except a carrier, that the bailee holds the goods for the lessee; or
(c) such an acknowledgment to the lessee by a carrier via reshipment or as a warehouse.
(3)(a) To stop delivery, a lessor shall so notify as to enable the bailee by reasonable diligence to prevent delivery of the goods.
(b) After notification, the bailee shall hold and deliver the goods according to the directions of the lessor, but the lessor is liable to the bailee for any ensuing charges or damages.
(c) A carrier who has issued a nonnegotiable bill of lading is not obliged to obey a notification to stop received from a person other than the consignor. (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995; amended 2015, No. 51, § B.6, eff. June 3, 2015.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—527. Lessor’s rights to dispose of goods

§ 2A—527. Lessor’s rights to dispose of goods
(1) After a default by a lessee under the lease contract of the type described in section 2A—523(1) or 2A—523(3)(a) of this title or after the lessor refuses to deliver or takes possession of goods (§ 2A—525 or 2A—526), or, if agreed, after other default by a lessee, the lessor may dispose of the goods concerned or the undelivered balance thereof by lease, sale, or otherwise.
(2) Except as otherwise provided with respect to damages liquidated in the lease agreement (§ 2A—504) or otherwise determined pursuant to agreement of the parties (§§ 1—302 and 2A—503), if the disposition is by lease agreement substantially similar to the original lease agreement and the new lease agreement is made in good faith and in a commercially reasonable manner, the lessor may recover from the lessee as damages (i) accrued and unpaid rent as of the date of the commencement of the term of the new lease agreement, (ii) the present value, as of the same date, of the total rent for the then remaining lease term of the original lease agreement minus the present value, as of the same date, of the rent under the new lease agreement applicable to that period of the new lease term which is comparable to the then remaining term of the original lease agreement, and (iii) any incidental damages allowed under section 2A—530 of this title, less expenses saved in consequence of the lessee’s default.
(3) If the lessor’s disposition is by lease agreement that for any reason does not qualify for treatment under subsection (2) of this section, or is by sale or otherwise, the lessor may recover from the lessee as if the lessor had elected not to dispose of the goods and section 2A—528 of this title governs.
(4) A subsequent buyer or lessee who buys or leases from the lessor in good faith for value as a result of a disposition under this section takes the goods free of the original lease contract and any rights of the original lessee even though the lessor fails to comply with one or more of the requirements of this article.
(5) The lessor is not accountable to the lessee for any profit made on any disposition. A lessee who has rightfully rejected or justifiably revoked acceptance shall account to the lessor for any excess over the amount of the lessee’s security interest (§ 2A—508(5)). (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995; amended 2007, No. 99 (Adj. Sess.), § 9.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—528. Lessor’s damages for non-acceptance, failure to pay, repudiation, or other default

§ 2A—528. Lessor’s damages for non-acceptance, failure to pay, repudiation, or other default
(1) Except as otherwise provided with respect to damages liquidated in the lease agreement (§ 2A—504) or otherwise determined pursuant to agreement of the parties (§§ 1—302 and 2A—503), if a lessor elects to retain the goods or a lessor elects to dispose of the goods and the disposition is by lease agreement that for any reason does not qualify for treatment under section 2A—527(2) of this title, or is by sale or otherwise, the lessor may recover from the lessee as damages for a default of the type described in section 2A—523(1) or 2A—523(3)(a) of this title, or, if agreed, for other default of the lessee, (i) accrued and unpaid rent as of the date of default if the lessee has never taken possession of the goods, or, if the lessee has taken possession of the goods, as of the date the lessor repossesses the goods or an earlier date on which the lessee makes a tender of the goods to the lessor, (ii) the present value as of the date determined under clause (i) of the total rent for the then remaining lease term of the original lease agreement minus the present value as of the same date of the market rent at the place where the goods are located computed for the same lease term, and (iii) any incidental damages allowed under section 2A—530 of this title, less expenses saved in consequence of the lessee’s default.
(2) If the measure of damages provided in subsection (1) of this section is inadequate to put a lessor in as good a position as performance would have, the measure of damages is the present value of the profit, including reasonable overhead, the lessor would have made from full performance by the lessee, together with any incidental damages allowed under section 2A—530 of this title, due allowance for costs reasonably incurred and due credit for payments or proceeds of disposition. (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995; amended 2007, No. 99 (Adj. Sess.), § 10.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—529. Lessor’s action for the rent

§ 2A—529. Lessor’s action for the rent
(1) After default by the lessee under the lease contract of the type described in section 2A—523(1) or 2A—523(3)(a) of this title or, if agreed, after other default by the lessee, if the lessor complies with subsection (2) of this section, the lessor may recover from the lessee as damages:
(a) for goods accepted by the lessee and not repossessed by or tendered to the lessor, and for conforming goods lost or damaged within a commercially reasonable time after risk of loss passes to the lessee (§ 2A—219), (i) accrued and unpaid rent as of the date of entry of judgment in favor of the lessor, (ii) the present value as of the same date of the rent for the then remaining lease term of the lease agreement, and (iii) any incidental damages allowed under section 2A—530 of this title, less expenses saved in consequence of the lessee’s default; and
(b) for goods identified to the lease contract if the lessor is unable after reasonable effort to dispose of them at a reasonable price or the circumstances reasonably indicate that effort will be unavailing, (i) accrued and unpaid rent as of the date of entry of judgment in favor of the lessor, (ii) the present value as of the same date of the rent for the then remaining lease term of the lease agreement, and (iii) any incidental damages allowed under section 2A—530 of this title, less expenses saved in consequence of the lessee’s default.
(2) Except as provided in subsection (3) of this section, the lessor shall hold for the lessee for the remaining lease term of the lease agreement any goods that have been identified to the lease contract and are in the lessor’s control.
(3) The lessor may dispose of the goods at any time before collection of the judgment for damages obtained pursuant to subsection (1) of this section. If the disposition is before the end of the remaining lease term of the lease agreement, the lessor’s recovery against the lessee for damages is governed by section 2A—527 or 2A—528 of this title, and the lessor will cause an appropriate credit to be provided against a judgment for damages to the extent that the amount of the judgment exceeds the recovery available pursuant to section 2A—527 or 2A—528 of this title.
(4) Payment of the judgment for damages obtained pursuant to subsection (1) entitles the lessee to the use and possession of the goods not then disposed of for the remaining lease term of and in accordance with the lease agreement.
(5) After default by the lessee under the lease contract of the type described in section 2A—523(1) or 2A—523(3)(a) of this title or, if agreed, after other default by the lessee, a lessor who is held not entitled to rent under this section must nevertheless be awarded damages for non-acceptance under section 2A—527 or 2A—528 of this title. (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—530. Lessor’s incidental damages

§ 2A—530. Lessor’s incidental damages
Incidental damages to an aggrieved lessor include any commercially reasonable charges, expenses, or commissions incurred in stopping delivery, in the transportation, care and custody of goods after the lessee’s default, in connection with return or disposition of the goods, or otherwise resulting from the default. (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—531. Standing to sue third parties for injury to goods

§ 2A—531. Standing to sue third parties for injury to goods
(1) If a third party so deals with goods that have been identified to a lease contract as to cause actionable injury to a party to the lease contract (a) the lessor has a right of action against the third party, and (b) the lessee also has a right of action against the third party if the lessee:
(i) has a security interest in the goods;
(ii) has an insurable interest in the goods; or
(iii) bears the risk of loss under the lease contract or has since the injury assumed that risk as against the lessor and the goods have been converted or destroyed.
(2) If at the time of the injury the party plaintiff did not bear the risk of loss as against the other party to the lease contract and there is no arrangement between them for disposition of the recovery, his or her suit or settlement, subject to his or her own interest, is as a fiduciary for the other party to the lease contract.
(3) Either party with the consent of the other may sue for the benefit of whom it may concern. (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 2A - Leases › § 2A—532. Lessor’s rights to residual interest

§ 2A—532. Lessor’s rights to residual interest
In addition to any other recovery permitted by this article or other law, the lessor may recover from the lessee an amount that will fully compensate the lessor for any loss of or damage to the lessor’s residual interest in the goods caused by the default of the lessee. (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—102. Subject matter

§ 3—102. Subject matter
(a) This article applies to negotiable instruments. It does not apply to money, to payment orders governed by Article 4A of this title, or to securities governed by Article 8 of this title.
(b) If there is conflict between this article and Article 4 or 9 of this title, Articles 4 and 9 govern.
(c) Regulations of the Board of Governors of the Federal Reserve System and operating circulars of the Federal Reserve Banks supersede any inconsistent provision of this article to the extent of the inconsistency.
(d) A negotiable instrument, although subject to this article, is also subject to the consumer protection statutes of this State, or any final consumer protection decision of a court of this State existing on the effective date of this article. In case of a conflict between this article and a consumer protection statute or decision of a court of this State, the statute or decision controls. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—105. Issue of instrument

§ 3—105. Issue of instrument
(a) “Issue” means the first delivery of an instrument by the maker or drawer, whether to a holder or nonholder, for the purpose of giving rights on the instrument to any person.
(b) An unissued instrument, or an unissued incomplete instrument that is completed, is binding on the maker or drawer, but nonissuance is a defense. An instrument that is conditionally issued or is issued for a special purpose is binding on the maker or drawer, but failure of the condition or special purpose to be fulfilled is a defense.
(c) “Issuer” applies to issued and unissued instruments and means a maker or drawer of an instrument. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—106. Unconditional promise or order

§ 3—106. Unconditional promise or order
(a) Except as provided in this section, for the purposes of section 3—104(a) of this title, a promise or order is unconditional unless it states (i) an express condition to payment, (ii) that the promise or order is subject to or governed by another writing, or (iii) that rights or obligations with respect to the promise or order are stated in another writing. A reference to another writing does not of itself make the promise or order conditional.
(b) A promise or order is not made conditional (i) by a reference to another writing for a statement of rights with respect to collateral, prepayment, or acceleration, or (ii) because payment is limited to resort to a particular fund or source.
(c) If a promise or order requires, as a condition to payment, a countersignature by a person whose specimen signature appears on the promise or order, the condition does not make the promise or order conditional for the purposes of section 3—104(a) of this title. If the person whose specimen signature appears on an instrument fails to countersign the instrument, the failure to countersign is a defense to the obligation of the issuer, but the failure does not prevent a transferee of the instrument from becoming a holder of the instrument.
(d) If a promise or order at the time it is issued or first comes into possession of a holder contains a statement, required by applicable statutory or administrative law, to the effect that the rights of a holder or transferee are subject to claims or defenses that the issuer could assert against the original payee, the promise or order is not thereby made conditional for the purposes of section 3—104(a) of this title; but if the promise or order is an instrument, there cannot be a holder in due course of the instrument. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—107. Instrument payable in foreign money

§ 3—107. Instrument payable in foreign money
Unless the instrument otherwise provides, an instrument that states the amount payable in foreign money may be paid in the foreign money or in an equivalent amount in dollars calculated by using the current bank-offered spot rate at the place of payment for the purchase of dollars on the day on which the instrument is paid. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—108. Payable on demand or at definite time

§ 3—108. Payable on demand or at definite time
(a) A promise or order is “payable on demand” if it (i) states that it is payable on demand or at sight, or otherwise indicates that it is payable at the will of the holder, or (ii) does not state any time of payment.
(b) A promise or order is “payable at a definite time” if it is payable on elapse of a definite period of time after sight or acceptance or at a fixed date or dates or at a time or times readily ascertainable at the time the promise or order is issued, subject to rights of (i) prepayment, (ii) acceleration, (iii) extension at the option of the holder, or (iv) extension to a further definite time at the option of the maker or acceptor or automatically upon or after a specified act or event.
(c) If an instrument, payable at a fixed date, is also payable upon demand made before the fixed date, the instrument is payable on demand until the fixed date and, if demand for payment is not made before that date, becomes payable at a definite time on the fixed date. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—109. Payable to bearer or to order

§ 3—109. Payable to bearer or to order
(a) A promise or order is payable to bearer if it:
(1) states that it is payable to bearer or to the order of bearer or otherwise indicates that the person in possession of the promise or order is entitled to payment;
(2) does not state a payee; or
(3) states that it is payable to or to the order of cash or otherwise indicates that it is not payable to an identified person.
(b) A promise or order that is not payable to bearer is payable to order if it is payable (i) to the order of an identified person or (ii) to an identified person or order. A promise or order that is payable to order is payable to the identified person.
(c) An instrument payable to bearer may become payable to an identified person if it is specially indorsed pursuant to section 3—205(a) of this title. An instrument payable to an identified person may become payable to bearer if it is indorsed in blank pursuant to section 3—205(b) of this title. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—110. Identification of person to whom instrument is payable

§ 3—110. Identification of person to whom instrument is payable
(a) The person to whom an instrument is initially payable is determined by the intent of the person, whether or not authorized, signing as, or in the name or behalf of, the issuer of the instrument. The instrument is payable to the person intended by the signer even if that person is identified in the instrument by a name or other identification that is not that of the intended person. If more than one person signs in the name or behalf of the issuer of an instrument and all the signers do not intend the same person as payee, the instrument is payable to any person intended by one or more of the signers.
(b) If the signature of the issuer of an instrument is made by automated means, such as a check-writing machine, the payee of the instrument is determined by the intent of the person who supplied the name or identification of the payee, whether or not authorized to do so.
(c) A person to whom an instrument is payable may be identified in any way, including by name, identifying number, office, or account number. For the purpose of determining the holder of an instrument, the following rules apply:
(1) If an instrument is payable to an account and the account is identified only by number, the instrument is payable to the person to whom the account is payable. If an instrument is payable to an account identified by number and by the name of a person, the instrument is payable to the named person, whether or not that person is the owner of the account identified by number.
(2) If an instrument is payable to:
(i) a trust, an estate, or a person described as trustee or representative of a trust or estate, the instrument is payable to the trustee, the representative, or a successor of either, whether or not the beneficiary or estate is also named;
(ii) a person described as agent or similar representative of a named or identified person, the instrument is payable to the represented person, the representative, or a successor of the representative;
(iii) a fund or organization that is not a legal entity, the instrument is payable to a representative of the members of the fund or organization; or
(iv) an office or to a person described as holding an office, the instrument is payable to the named person, the incumbent of the office, or a successor to the incumbent.
(d) If an instrument is payable to two or more persons alternatively, it is payable to any of them and may be negotiated, discharged, or enforced by any or all of them in possession of the instrument. If an instrument is payable to two or more persons not alternatively, it is payable to all of them and may be negotiated, discharged, or enforced only by all of them. If an instrument payable to two or more persons is ambiguous as to whether it is payable to the persons alternatively, the instrument is payable to the persons alternatively. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—111. Place of payment

§ 3—111. Place of payment
Except as otherwise provided for items in article 4, an instrument is payable at the place of payment stated in the instrument. If no place of payment is stated, an instrument is payable at the address of the drawee or maker stated in the instrument. If no address is stated, the place of payment is the place of business of the drawee or maker. If a drawee or maker has more than one place of business, the place of payment is any place of business of the drawee or maker chosen by the person entitled to enforce the instrument. If the drawee or maker has no place of business, the place of payment is the residence of the drawee or maker. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—112. Interest

§ 3—112. Interest
(a) Unless otherwise provided in the instrument, (i) an instrument is not payable with interest, and (ii) interest on an interest-bearing instrument is payable from the date of the instrument.
(b) Interest may be stated in an instrument as a fixed or variable amount of money or it may be expressed as a fixed or variable rate or rates. The amount or rate of interest may be stated or described in the instrument in any manner and may require reference to information not contained in the instrument. If an instrument provides for interest, but the amount of interest payable cannot be ascertained from the description, interest is payable at the judgment rate in effect at the place of payment of the instrument and at the time interest first accrues. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—113. Date of instrument

§ 3—113. Date of instrument
(a) An instrument may be antedated or postdated. The date stated determines the time of payment if the instrument is payable at a fixed period after date. Except as provided in section 4-401(c) of this title, an instrument payable on demand is not payable before the date of the instrument.
(b) If an instrument is undated, its date is the date of its issue or, in the case of an unissued instrument, the date it first comes into possession of a holder. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—114. Contradictory terms of instrument

§ 3—114. Contradictory terms of instrument
If an instrument contains contradictory terms, typewritten terms prevail over printed terms, handwritten terms prevail over both, and words prevail over numbers. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—115. Incomplete instrument

§ 3—115. Incomplete instrument
(a) “Incomplete instrument” means a signed writing, whether or not issued by the signer, the contents of which show at the time of signing that it is incomplete but that the signer intended it to be completed by the addition of words or numbers.
(b) Subject to subsection (c), if an incomplete instrument is an instrument under section 3—104 of this title, it may be enforced according to its terms if it is not completed, or according to its terms as augmented by completion. If an incomplete instrument is not an instrument under section 3—104 of this title, but, after completion, the requirements of section 3—104 of this title are met, the instrument may be enforced according to its terms as augmented by completion.
(c) If words or numbers are added to an incomplete instrument without authority of the signer, there is an alteration of the incomplete instrument under section 3—407 of this title.
(d) The burden of establishing that words or numbers were added to an incomplete instrument without authority of the signer is on the person asserting the lack of authority. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—116. Joint and several liability; contribution

§ 3—116. Joint and several liability; contribution
(a) Except as otherwise provided in the instrument, two or more persons who have the same liability on an instrument as makers, drawers, acceptors, indorsers who indorse as joint payees, or anomalous indorsers are jointly and severally liable in the capacity in which they sign.
(b) Except as provided in section 3—419(e) of this title or by agreement of the affected parties, a party having joint and several liability who pays the instrument is entitled to receive from any party having the same joint and several liability contribution in accordance with applicable law.
(c) Discharge of one party having joint and several liability by a person entitled to enforce the instrument does not affect the right under subsection (b) of a party having the same joint and several liability to receive contribution from the party discharged. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—117. Other agreements affecting instrument

§ 3—117. Other agreements affecting instrument
Subject to applicable law regarding exclusion of proof of contemporaneous or previous agreements, the obligation of a party to an instrument to pay the instrument may be modified, supplemented, or nullified by a separate agreement of the obligor and a person entitled to enforce the instrument, if the instrument is issued or the obligation is incurred in reliance on the agreement or as part of the same transaction giving rise to the agreement. To the extent an obligation is modified, supplemented, or nullified by an agreement under this section, the agreement is a defense to the obligation. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—118. Statute of limitations

§ 3—118. Statute of limitations
(a) Except as provided in subsection (e), an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six years after the due date or dates stated in the note or, if a due date is accelerated, within six years after the accelerated due date.
(b) Except as provided in subsection (d) or (e), if demand for payment is made to the maker of a note payable on demand, an action to enforce the obligation of a party to pay the note must be commenced within six years after the demand. If no demand for payment is made to the maker, an action to enforce the note is barred if neither principal nor interest on the note has been paid for a continuous period of 10 years.
(c) Except as provided in subsection (d), an action to enforce the obligation of a party to an unaccepted draft to pay the draft must be commenced within three years after dishonor of the draft or 10 years after the date of the draft, whichever period expires first.
(d) An action to enforce the obligation of the acceptor of a certified check or the issuer of a teller’s check, cashier’s check, or traveler’s check must be commenced within three years after demand for payment is made to the acceptor or issuer, as the case may be.
(e) An action to enforce the obligation of a party to a certificate of deposit to pay the instrument must be commenced within six years after demand for payment is made to the maker, but if the instrument states a due date and the maker is not required to pay before that date, the six-year period begins when a demand for payment is in effect and the due date has passed.
(f) An action to enforce the obligation of a party to pay an accepted draft, other than a certified check, must be commenced (i) within six years after the due date or dates stated in the draft or acceptance if the obligation of the acceptor is payable at a definite time, or (ii) within six years after the date of the acceptance if the obligation of the acceptor is payable on demand.
(g) Unless governed by other law regarding claims for indemnity or contribution, an action (i) for conversion of an instrument, for money had and received, or like action based on conversion, (ii) for breach of warranty, or (iii) to enforce an obligation, duty, or right arising under this article and not governed by this section must be commenced within three years after the [cause of action] accrues. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—119. Notice of right to defend action

§ 3—119. Notice of right to defend action
In an action for breach of an obligation for which a third person is answerable over pursuant to this article or Article 4 of this title, the defendant may give the third person written notice of the litigation, and the person notified may then give similar notice to any other person who is answerable over. If the notice states (i) that the person notified may come in and defend and (ii) that failure to do so will bind the person notified in an action later brought by the person giving the notice as to any determination of fact common to the two litigations, the person notified is so bound unless after seasonable receipt of the notice the person notified does come in and defend. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—201. Negotiation

§ 3—201. Negotiation
(a) “Negotiation” means a transfer of possession, whether voluntary or involuntary, of an instrument by a person other than the issuer to a person who thereby becomes its holder.
(b) Except for negotiation by a remitter, if an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its indorsement by the holder. If an instrument is payable to bearer, it may be negotiated by transfer of possession alone. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
2023 Vermont Statutes › Title 9A - Uniform Commercial Code › Article 3 - Commercial Paper › § 3—202. Negotiation subject to rescission

§ 3—202. Negotiation subject to rescission
(a) Negotiation is effective even if obtained (i) from an infant, a corporation exceeding its powers, or a person without capacity, (ii) by fraud, duress, or mistake, or (iii) in breach of duty or as part of an illegal transaction.
(b) To the extent permitted by other law, negotiation may be rescinded or may be subject to other remedies, but those remedies may not be asserted against a subsequent holder in due course or a person paying the instrument in good faith and without knowledge of facts that are a basis for rescission or other remedy. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)