{"data":{"id":"us-ky/krs-355.3-106","jurisdiction":"us-ky","citation":"KRS 355.3-106","heading":"Unconditional promise or order.","body":"(1) Except as provided in this section, for the purposes of KRS 355.3-104(1), a promise\nor order is unconditional unless it states:\n(a) An express condition to payment;\n(b) That the promise or order is subject to or governed by another record; or\n(c) That righ ts or obligations with respect to the promise or order are stated in\nanother record. A reference to another record does not of itself make the\npromise or order conditional.\n(2) A promise or order is not made conditional:\n(a) By a reference to another recor d for a statement of rights with respect to\ncollateral, prepayment, or acceleration; or\n(b) Because payment is limited to resort to a particular fund or source.\n(3) If a promise or order requires, as a condition to payment, a countersignature by a\nperson w hose specimen signature appears on the promise or order, the condition\ndoes not make the promise or order conditional for the purposes of KRS 355.3 -\n104(1). If the person whose specimen signature appears on an instrument fails to\ncountersign the instrument,  the failure to countersign is a defense to the obligation\nof the issuer, but the failure does not prevent a transferee of the instrument from\nbecoming a holder of the instrument.\n(4) If a promise or order at the time it is issued or first comes into posse ssion of a\nholder contains a statement, required by applicable statutory or administrative law,\nto the effect that the rights of a holder or transferee are subject to claims or defenses\nthat the issuer could assert against the original payee, the promise o r order is not\nthereby made conditional for the purposes of KRS 355.3 -104(1); but if the promise\nor order is an instrument, there cannot be a holder in due course of the instrument.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=33434","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:43Z","sha256":"11420b69d4403aa1fb311fbf6e98a9dce888dd2863d1482069721352793df63c","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.3-105","next":"us-ky/krs-355.3-107"},"notice":"GroundRules: Original legal text. Not legal advice."}