GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

H	1 

HOUSE BILL 238

Short Title:  Variable Rate Notes/Negot.	(Public)
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Sponsors: Representative Rhyne.
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Referred to:  Commerce.
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February 15, 1989

A BILL TO BE ENTITLED
AN ACT TO MAKE VARIABLE-RATE NOTES NEGOTIABLE.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 25-3-106(1) reads as rewritten:
"§ 25-3-106.  Sum certain.
(1)	The sum payable is a sum certain even though it is to be paid
(a)	With stated interest or by stated installments; or
(b)	With stated different rates of interest before and after default or a specified date; or
(c)	With a stated discount or addition if paid before or after the date fixed for payment; or
(d)	With exchange or less exchange, whether at a fixed rate or at the current rate; or
(e)	With costs of collection or an attorney's fee or both upon default; or
(f)	With a renegotiable or variable rate of interest; or
(g)	With renegotiable, variable, graduated, annuity or price-level adjusted payment."
Sec. 2. G.S. 25-3-305 reads as rewritten:
"§ 25-3-305.  Rights of a holder in due course.
To the extent that a holder is a holder in due course he takes the instrument free from
(1)	All claims to it on the part of any person; and
(2)	All defenses of any party to the instrument with whom the holder has not dealt except
(a)	Infancy, to the extent that it is a defense to a simple contract; and
(b)	Such other incapacity, or duress, or illegality of the transaction, as renders the obligation of the party a nullity; and
(c)	Such misrepresentation as has induced the party to sign the instrument with neither knowledge nor reasonable opportunity to obtain knowledge of its character or its essential terms; and
(d)	Discharge in insolvency proceedings; and any other discharge of which the holder has notice when he takes the instrument; and
(e)	In consumer credit transactions, prior payment is a defense to a foreclosure proceeding based on default."
Sec. 3.  This act is effective upon ratification.