{"data":{"id":"us-ok/okla.-stat.-tit.-12a-12a-3-206","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 12A, § 12A-3-206","heading":"Restrictive Indorsement","body":"RESTRICTIVE INDORSEMENT\n\n(a) An indorsement limiting payment to a particular person or\n\notherwise prohibiting further transfer or negotiation of the\n\ninstrument is not effective to prevent further transfer or\n\nnegotiation of the instrument.\n\n(b) An indorsement stating a condition to the right of the\n\nindorsee to receive payment does not affect the right of the\n\nindorsee to enforce the instrument. A person paying the instrument\n\nor taking it for value or collection may disregard the condition,\n\nand the rights and liabilities of that person are not affected by\n\nwhether the condition has been fulfilled.\n\n(c) If an instrument bears an indorsement (i) described in\n\nsubsection (b) of Section 4-201 of this title, or (ii) in blank or\n\nto a particular bank using the words \"for deposit\", \"for\n\ncollection\", or other words indicating a purpose of having the\n\ninstrument collected by a bank for the indorser or for a particular\n\naccount, the following rules apply:\n\n(1) A person, other than a bank, who purchases the\n\ninstrument when so indorsed converts the instrument\n\nunless the amount paid for the instrument is received\n\nby the indorser or applied consistently with the\n\nindorsement;\n\n(2) A depositary bank that purchases the instrument or\n\ntakes it for collection when so indorsed converts the\n\ninstrument unless the amount paid by the bank with\n\nrespect to the instrument is received by the indorser\n\nor applied consistently with the indorsement;\n\n(3) A payor bank that is also the depositary bank or that\n\ntakes the instrument for immediate payment over the\n\ncounter from a person other than a collecting bank\n\nconverts the instrument unless the proceeds of the\n\ninstrument are received by the indorser or applied\n\nconsistently with the indorsement; and\n\n(4) Except as otherwise provided in paragraph (3) of this\n\nsubsection, a payor bank or intermediary bank may\n\ndisregard the indorsement and is not liable if the\n\nproceeds of the instrument are not received by the\n\nindorser or applied consistently with the indorsement.\n\n(d) Except for an indorsement covered by subsection (c) of this\n\nsection, if an instrument bears an indorsement using words to the\n\neffect that payment is to be made to the indorsee as agent, trustee,\n\nor other fiduciary for the benefit of the indorser or another\n\nperson, the following rules apply:\n\n(1) Unless there is notice of breach of fiduciary duty as\n\nprovided in Section 3-307 of this title, a person who\n\npurchases the instrument from the indorsee or takes\n\nthe instrument from the indorsee for collection or\n\npayment may pay the proceeds of payment or the value\n\ngiven for the instrument to the indorsee without\n\nregard to whether the indorsee violates a fiduciary\n\nduty to the indorser; and\n\n(2) A subsequent transferee of the instrument or person\n\nwho pays the instrument is neither given notice nor\n\notherwise affected by the restriction in the\n\nindorsement unless the transferee or payor knows that\n\nthe fiduciary dealt with the instrument or its\n\nproceeds in breach of fiduciary duty.\n\n(e) The presence on an instrument of an indorsement to which\n\nthis section applies does not prevent a purchaser of the instrument\n\nfrom becoming a holder in due course of the instrument unless the\n\npurchaser is a converter under subsection (c) of this section or has\n\nnotice or knowledge of breach of fiduciary duty as stated in\n\nsubsection (d) of this section.\n\n(f) In an action to enforce the obligation of a party to pay\n\nthe instrument, the obligor has a defense if payment would violate\n\nan indorsement to which this section applies and the payment is not\n\npermitted by this section.","path":["OK Code","Title 12A"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os12A.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"e385304da55d2711e13febd13a07f5f6984127aad2f89d2bad3ac272706c9c06","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-12a-12a-3-205","next":"us-ok/okla.-stat.-tit.-12a-12a-3-207"},"notice":"GroundRules: Original legal text. Not legal advice."}