Substitute House Bill No. 7341
          Substitute House Bill No. 7341

              PUBLIC ACT NO. 91-304

AN  ACT  REVISING  ARTICLES 3 AND 4 OF THE UNIFORM
COMMERCIAL CODE CONCERNING NEGOTIABLE  INSTRUMENTS
AND BANK DEPOSITS AND COLLECTIONS.


    Section  1.  Section 42a-3-101 of the  general
statutes  is   repealed   and   the  following  is
substituted in lieu thereof:
    [This article shall be known and may be  cited
as Uniform Commercial Code--Commercial Paper.]
    THIS  ARTICLE   MAY   BE   CITED   AS  UNIFORM
COMMERCIAL CODE--NEGOTIABLE INSTRUMENTS.
    Sec.   2.   Section 42a-3-102 of  the  general
statutes  is   repealed   and   the  following  is
substituted in lieu thereof:
    [(1)  In  this  article  unless  the   context
otherwise requires:  (a)  "Issue"  means the first
delivery  of  an  instrument  to a  holder  or   a
remitter. (b) An "order" is a direction to pay and
must be more than an authorization or request.  It
must identify the  person  to  pay with reasonable
certainty. It may be addressed to one or more such
persons jointly or in  the  alternative but not in
succession.   (c) A "promise" is an undertaking to
pay and must be more than  an acknowledgment of an
obligation.  (d) "Secondary party" means a  drawer
or endorser.  (e) "Instrument"  means a negotiable
instrument.
    (2) Other definitions applying to this article
and the sections in which they appear are:
    "Acceptance". Section 42a-3-410.
    "Accommodation party". Section 42a-3-415.
    "Alteration". Section 42a-3-407.
    "Certificate of deposit". Section 42a-3-104.
    "Certification". Section 42a-3-411.
    "Check". Section 42a-3-104.
    "Definite time". Section 42a-3-109.
    "Dishonor". Section 42a-3-507.
    "Draft". Section 42a-3-104.
    "Holder in due course". Section 42a-3-302.
    "Negotiation". Section 42a-3-202.
    "Note". Section 42a-3-104.
    "Notice of dishonor". Section 42a-3-508.
    "On demand". Section 42a-3-108.
    "Presentment". Section 42a-3-504.
    "Protest". Section 42a-3-509.
    "Restrictive endorsement". Section 42a-3-205.
    "Signature". Section 42a-3-401.
    (3)  The   following   definitions   in  other
articles apply to this article:
    "Account". Section 42a-4-104.
    "Banking day". Section 42a-4-104.
    "Clearing house". Section 42a-4-104.
    "Collecting bank". Section 42a-4-105.
    "Customer". Section 42a-4-104.
    "Depositary bank". Section 42a-4-105.
    "Documentary draft". Section 42a-4-104.
    "Intermediary bank". Section 42a-4-105.
    "Item". Section 42a-4-104.
    "Midnight deadline". Section 42a-4-104.
    "Payor bank". Section 42a-4-105.
    (4)  In  addition article 1  contains  general
definitions  and  principles  of  construction and
interpretation    applicable    throughout    this
article.]
    (a)  THIS   ARTICLE   APPLIES   TO  NEGOTIABLE
INSTRUMENTS.   IT  DOES  NOT APPLY TO  MONEY,   TO
PAYMENT  ORDERS  GOVERNED  BY  ARTICLE  4A,  OR TO
SECURITIES GOVERNED BY ARTICLE 8.
    (b) IF THERE IS CONFLICT BETWEEN THIS  ARTICLE
AND ARTICLE 4 OR 9, 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.
    Sec.  3.   Section  42a-3-103  of  the general
statutes   is  repealed  and  the   following   is
substituted in lieu thereof:
    [(1) This  article  does  not  apply to money,
documents of title or investment securities.
    (2) The provisions of this article are subject
to the provisions of articles 4 and 9.]
    (a) IN THIS ARTICLE:
    (1) "ACCEPTOR" MEANS A DRAWEE WHO HAS ACCEPTED
A DRAFT.
    (2) "DRAWEE" MEANS A PERSON ORDERED IN A DRAFT
TO MAKE PAYMENT.
    (3) "DRAWER" MEANS  A  PERSON  WHO SIGNS OR IS
IDENTIFIED   IN  A  DRAFT  AS A  PERSON   ORDERING
PAYMENT.
    (4) "GOOD FAITH" MEANS HONESTY IN FACT AND THE
OBSERVANCE  OF REASONABLE COMMERCIAL STANDARDS  OF
FAIR DEALING.
    (5) "MAKER" MEANS  A  PERSON  WHO  SIGNS OR IS
IDENTIFIED  IN A NOTE AS A PERSON  UNDERTAKING  TO
PAY.
    (6) "ORDER" MEANS A WRITTEN INSTRUCTION TO PAY
MONEY SIGNED BY THE PERSON GIVING THE INSTRUCTION.
THE INSTRUCTION MAY BE  ADDRESSED  TO  ANY PERSON,
INCLUDING  THE PERSON GIVING THE INSTRUCTION,   OR
TO  ONE  OR  MORE   PERSONS   JOINTLY  OR  IN  THE
ALTERNATIVE    BUT   NOT   IN   SUCCESSION.     AN
AUTHORIZATION TO PAY IS  NOT  AN  ORDER UNLESS THE
PERSON  AUTHORIZED  TO PAY IS ALSO  INSTRUCTED  TO
PAY.
    (7) "ORDINARY  CARE"  IN  THE CASE OF A PERSON
ENGAGED IN BUSINESS MEANS OBSERVANCE OF REASONABLE
COMMERCIAL STANDARDS,   PREVAILING  IN THE AREA IN
WHICH  THE PERSON IS LOCATED, WITH RESPECT TO  THE
BUSINESS IN WHICH THE  PERSON  IS ENGAGED.  IN THE
CASE  OF  A  BANK THAT  TAKES  AN  INSTRUMENT  FOR
PROCESSING FOR  COLLECTION OR PAYMENT BY AUTOMATED
MEANS,   REASONABLE  COMMERCIAL STANDARDS  DO  NOT
REQUIRE THE BANK TO  EXAMINE THE INSTRUMENT IF THE
FAILURE  TO  EXAMINE DOES NOT VIOLATE  THE  BANK'S
PRESCRIBED PROCEDURES AND THE BANK'S PROCEDURES DO
NOT  VARY UNREASONABLY FROM GENERAL BANKING  USAGE
NOT DISAPPROVED BY THIS ARTICLE OR ARTICLE 4.
    (8) "PARTY" MEANS A PARTY TO AN INSTRUMENT.
    (9) "PROMISE" MEANS A  WRITTEN  UNDERTAKING TO
PAY MONEY SIGNED BY THE PERSON UNDERTAKING TO PAY.
AN ACKNOWLEDGMENT OF AN OBLIGATION  BY THE OBLIGOR
IS   NOT   A  PROMISE  UNLESS  THE  OBLIGOR   ALSO
UNDERTAKES TO PAY THE OBLIGATION.
    (10) "PROVE" WITH  RESPECT  TO A FACT MEANS TO
MEET THE BURDEN OF ESTABLISHING THE FACT  (SECTION
42a-1-201(8)).
    (11) "REMITTER" MEANS  A  PERSON WHO PURCHASES
AN INSTRUMENT FROM ITS ISSUER IF THE INSTRUMENT IS
PAYABLE TO  AN  IDENTIFIED  PERSON  OTHER THAN THE
PURCHASER.
    (b) OTHER DEFINITIONS APPLYING TO THIS ARTICLE
AND THE SECTIONS IN WHICH THEY APPEAR ARE:
    "ACCEPTANCE". SECTION 42a-3-409.
    "ACCOMMODATED PARTY". SECTION 42a-3-419.
    "ACCOMMODATION PARTY". SECTION 42a-3-419.
    "ALTERATION". SECTION 42a-3-407.
    "ANOMALOUS INDORSEMENT". SECTION 42a-3-205.
    "BLANK INDORSEMENT". SECTION 42a-3-205.
    "CASHIER'S CHECK". SECTION 42a-3-104.
    "CERTIFICATE OF DEPOSIT". SECTION 42a-3-104.
    "CERTIFIED CHECK." SECTION 42a-3-409.
    "CHECK". SECTION 42a-3-104.
    "CONSIDERATION". SECTION 42a-3-303.
    "DRAFT". SECTION 42a-3-104.
    "HOLDER IN DUE COURSE". SECTION 42a-3-302.
    "INCOMPLETE INSTRUMENT". SECTION 42a-3-115.
    "INDORSEMENT". SECTION 42a-3-204.
    "INDORSER". SECTION 42a-3-204.
    "INSTRUMENT" SECTION 42a-3-104.
    "ISSUE". SECTION 42a-3-105.
    "ISSUER". SECTION 42a-3-105.
    "NEGOTIABLE INSTRUMENT". SECTION 42a-3-104.
    "NEGOTIATION". SECTION 42a-3-201.
    "NOTE". SECTION 42a-3-104.
    "PAYABLE AT A DEFINITE TIME". SECTION 42a-3-108.
    "PAYABLE ON DEMAND". SECTION 42a-3-108.
    "PAYABLE TO BEARER". SECTION 42a-3-109.
    "PAYABLE TO ORDER". SECTION 42a-3-109.
    "PAYMENT". SECTION 42a-3-602.
    "PERSON ENTITLED TO ENFORCE". SECTION 42a-3-301.
    "PRESENTMENT". SECTION 42a-3-501.
    "REACQUISITION". SECTION 42a-3-207.
    "SPECIAL INDORSEMENT". SECTION 42a-3-205.
    "TELLER'S CHECK". SECTION 42a-3-104.
    "TRANSFER OF INSTRUMENT". SECTION 42a-3-203.
    "TRAVELER'S CHECK". SECTION 42a-3-104.
    "VALUE". SECTION 42a-3-303.
    (c)  THE   FOLLOWING   DEFINITIONS   IN  OTHER
ARTICLES APPLY TO THIS ARTICLE:
    "BANK". SECTION 42a-4-105.
    "BANKING DAY". SECTION 42a-4-104.
    "CLEARING HOUSE". SECTION 42a-4-104.
    "COLLECTING BANK". SECTION 42a-4-105.
    "DEPOSITARY BANK". SECTION 42a-4-105.
    "DOCUMENTARY DRAFT" SECTION 42a-4-104.
    "INTERMEDIARY BANK". SECTION 42a-4-105.
    "ITEM". SECTION 42a-4-104.
    "PAYOR BANK". SECTION 42a-4-105.
    "SUSPENDS PAYMENTS". SECTION 42a-4-104.
    (d)  IN ADDITION,  ARTICLE 1 CONTAINS  GENERAL
DEFINITIONS  AND  PRINCIPLES  OF  CONSTRUCTION AND
INTERPRETATION APPLICABLE THROUGHOUT THIS ARTICLE.
    Sec.   4.   Section 42a-3-104 of  the  general
statutes  is   repealed   and   the  following  is
substituted in lieu thereof:
    [(1) Any writing to be a negotiable instrument
within this  article  must  (a)  be  signed by the
maker or drawer;  and (b) contain an unconditional
promise or order to pay a sum certain in money and
no other promise, order, obligation or power given
by the maker or  drawer  except  as  authorized by
this article; and (c) be payable on demand or at a
definite time;  and (d)  be payable to order or to
bearer.
    (2)   A   writing  which  complies  with   the
requirements of  this  section  is  (a)  a "draft"
("bill  of  exchange") if it is an  order;  (b)  a
"check" if it  is  a  draft  drawn  on  a bank and
payable on demand; (c) a "certificate of  deposit"
if it is an acknowledgment by a bank of receipt of
money with an engagement to repay it; (d) a "note"
if it is a  promise  other  than  a certificate of
deposit.
    (3)  As used in other articles of this  title,
and as the context may require, the terms "draft",
"check",  "certificate of deposit", and "note" may
refer to  instruments  which  are  not  negotiable
within  this  article as well  as  to  instruments
which are so negotiable.]
    (a) EXCEPT AS PROVIDED  IN SUBSECTIONS (c) AND
(d),     "NEGOTIABLE    INSTRUMENT"    MEANS    AN
UNCONDITIONAL  PROMISE  OR  ORDER  TO  PAY A FIXED
AMOUNT OF MONEY, WITH OR WITHOUT INTEREST OR OTHER
CHARGES DESCRIBED IN THE PROMISE OR ORDER, IF IT:
    (1) IS PAYABLE  TO  BEARER  OR TO ORDER AT THE
TIME  IT IS ISSUED OR FIRST COMES INTO  POSSESSION
OF A HOLDER;
    (2) IS  PAYABLE  ON  DEMAND  OR  AT A DEFINITE
TIME; AND
    (3)  DOES NOT STATE ANY OTHER  UNDERTAKING  OR
INSTRUCTION BY  THE  PERSON  PROMISING OR ORDERING
PAYMENT  TO DO ANY ACT IN ADDITION TO THE  PAYMENT
OF MONEY, BUT THE PROMISE OR ORDER MAY CONTAIN (i)
AN  UNDERTAKING  OR  POWER TO GIVE,  MAINTAIN,  OR
PROTECT COLLATERAL  TO  SECURE  PAYMENT,   (ii) AN
AUTHORIZATION  OR  POWER TO THE HOLDER TO  CONFESS
JUDGMENT OR REALIZE ON  OR  DISPOSE OF COLLATERAL,
OR  (iii)  A  WAIVER  OF THE BENEFIT  OF  ANY  LAW
INTENDED FOR  THE  ADVANTAGE  OR  PROTECTION OF AN
OBLIGOR.
    (b)     "INSTRUMENT"    MEANS A     NEGOTIABLE
INSTRUMENT.
    (c)  AN   ORDER   THAT   MEETS   ALL   OF  THE
REQUIREMENTS  OF SUBSECTION (a),  EXCEPT PARAGRAPH
(1),  AND OTHERWISE FALLS WITHIN THE DEFINITION OF
"CHECK"   IN   SUBSECTION  (f)   IS A   NEGOTIABLE
INSTRUMENT AND A CHECK.
    (d) A PROMISE OR ORDER  OTHER  THAN A CHECK IS
NOT AN INSTRUMENT IF, AT THE TIME IT IS ISSUED  OR
FIRST  COMES  INTO  POSSESSION  OF  A  HOLDER,  IT
CONTAINS   A   CONSPICUOUS   STATEMENT,    HOWEVER
EXPRESSED, TO THE EFFECT THAT THE PROMISE OR ORDER
IS NOT NEGOTIABLE OR IS NOT AN INSTRUMENT GOVERNED
BY THIS ARTICLE.
    (e) AN  INSTRUMENT  IS  A  "NOTE"  IF  IT IS A
PROMISE AND IS A "DRAFT" IF IT IS AN ORDER.  IF AN
INSTRUMENT FALLS  WITHIN  THE  DEFINITION  OF BOTH
"NOTE"  AND "DRAFT", A PERSON ENTITLED TO  ENFORCE
THE INSTRUMENT MAY TREAT IT AS EITHER.
    (f) "CHECK" MEANS  (i)  A  DRAFT, OTHER THAN A
DOCUMENTARY  DRAFT, PAYABLE ON DEMAND AND DRAWN ON
A BANK OR  (ii)  A  CASHIER'S  CHECK  OR  TELLER'S
CHECK. AN INSTRUMENT MAY BE A CHECK EVEN THOUGH IT
IS DESCRIBED ON ITS FACE  BY  ANOTHER TERM, SUCH A
"MONEY ORDER".
    (g)   "CASHIER'S  CHECK"  MEANS A  DRAFT  WITH
RESPECT TO WHICH  THE  DRAWER  AND  DRAWEE ARE THE
SAME BANK OR BRANCHES OF THE SAME BANK.
    (h) "TELLER'S CHECK" MEANS A DRAFT DRAWN BY  A
BANK (i) ON  ANOTHER  BANK,  OR (ii) PAYABLE AT OR
THROUGH A BANK.
    (i)  "TRAVELER'S  CHECK" MEANS  AN  INSTRUMENT
THAT (i) IS PAYABLE ON DEMAND, (ii) IS DRAWN ON OR
PAYABLE AT OR THROUGH A BANK, (iii) IS  DESIGNATED
BY   THE   TERM   "TRAVELER'S   CHECK"   OR  BY  A
SUBSTANTIALLY  SIMILAR TERM, AND (iv) REQUIRES, AS
A CONDITION TO PAYMENT,  A  COUNTERSIGNATURE  BY A
PERSON  WHOSE  SPECIMEN SIGNATURE APPEARS  ON  THE
INSTRUMENT.
    (j)   "CERTIFICATE   OF   DEPOSIT"   MEANS  AN
INSTRUMENT CONTAINING AN ACKNOWLEDGMENT BY A  BANK
THAT A SUM OF MONEY HAS  BEEN RECEIVED BY THE BANK
AND  A  PROMISE  BY THE BANK TO REPAY THE  SUM  OF
MONEY.  A CERTIFICATE OF DEPOSIT  IS A NOTE OF THE
BANK.
    Sec.   5.   Section 42a-3-105 of  the  general
statutes  is   repealed   and   the  following  is
substituted in lieu thereof:
    [(1)    A   promise   or    order    otherwise
unconditional is not  made conditional by the fact
that  the instrument (a) is subject to implied  or
constructive    conditions;    or   (b) states its
consideration,   whether performed or promised, or
the transaction which gave rise to the instrument,
or  that  the  promise or order  is  made  or  the
instrument matures in  accordance with or "as per"
such  transaction; or (c) refers to or states that
it arises out of a separate agreement or refers to
a  separate agreement for rights as to  prepayment
or acceleration; or (d)  states  that  it is drawn
under a letter of credit; or (e) states that it is
secured, whether by mortgage, reservation of title
or   otherwise;   or  (f)  indicates a  particular
account to be debited or any  other fund or source
from  which reimbursement is expected; or  (g)  is
limited to payment out of a particular fund or the
proceeds of a particular source, if the instrument
is issued by a  government  or governmental agency
or unit;  or (h) is limited to payment out of  the
entire assets of  a  partnership,   unincorporated
association,   trust or estate by or on behalf  of
which the instrument is issued.
    (2) A promise or order is not unconditional if
the instrument (a) states that it is subject to or
governed by any  other  agreement;  or  (b) states
that  it  is to be paid only out  of a  particular
fund  or  source   except   as  provided  in  this
section.]
    (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.
    Sec.   6.   Section 42a-3-106 of  the  general
statutes  is   repealed   and   the  following  is
substituted in lieu thereof:
    [(1)  The  sum payable is a sum  certain  even
though it is to be paid  (a)  with stated interest
or  by  stated  instalments;  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  provision for payment by the maker of  taxes
levied or  assessed  upon  the  instrument  or the
indebtedness evidenced thereby.
    (2) Nothing in this section shall validate any
term which is otherwise illegal.]
    (a) EXCEPT  AS  PROVIDED  IN THIS SECTION, FOR
THE PURPOSES OF SECTION 42a-3-104(a), 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 42a-3-104(a). 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 42a-3-104(a); BUT  IF
THE PROMISE  OR  ORDER  IS  AN  INSTRUMENT,  THERE
CANNOT   BE   A  HOLDER  IN  DUE  COURSE  OF   THE
INSTRUMENT.
    Sec.  7.   Section  42a-3-107  of  the general
statutes   is  repealed  and  the   following   is
substituted in lieu thereof:
    [(1) An instrument is  payable in money if the
medium of exchange in which it is payable is money
at the time the instrument is made.  An instrument
payable  in  "currency"  or  "current  funds"   is
payable in money.
    (2) A promise or order  to pay a sum stated in
a  foreign currency is for a sum certain in  money
and,   unless  a  different  medium  of payment is
specified  in the instrument, may be satisfied  by
payment of that number of dollars which the stated
foreign currency will purchase at the buying sight
rate for that  currency  on  the  day on which the
instrument is payable or, if payable on demand, on
the day of demand. If such an instrument specifies
a  foreign currency as the medium of  payment  the
instrument is payable in that currency.]
    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.
    Sec.  8.   Section  42a-3-108  of  the general
statutes   is  repealed  and  the   following   is
substituted in lieu thereof:
    [Instruments payable  on  demand include those
payable  at sight or on presentation and those  in
which no time for payment is stated.]
    (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.
    Sec.   9.   Section 42a-3-109 of  the  general
statutes  is   repealed   and   the  following  is
substituted in lieu thereof:
    [(1)  An instrument is payable  at a  definite
time if by  its  terms  it  is  payable  (a) on or
before a stated date or at a fixed period after  a
stated date; or (b) at a fixed period after sight;
or   (c)  at  a  definite  time  subject  to   any
acceleration; or (d) at a definite time subject to
extension  at  the  option of the  holder,  or  to
extension to a further definite time at the option
of  the maker or acceptor or automatically upon or
after a specified act or event.
    (2)  An  instrument  which  by  its  terms  is
otherwise  payable  only  upon  an  act  or  event
uncertain as to time or  occurrence is not payable
at  a  definite time even though the act or  event
has occurred.]
    (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  42a-3-205(a).   AN
INSTRUMENT PAYABLE  TO  AN  IDENTIFIED  PERSON MAY
BECOME  PAYABLE  TO  BEARER IF IT IS  INDORSED  IN
BLANK PURSUANT TO SECTION 42a-3-205(b).
    Sec.  10.   Section  42a-3-110  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1) An instrument is payable to order when by
its terms it is payable to the order or assigns of
any  person  therein   specified  with  reasonable
certainty,  or to him or his order, or when it  is
conspicuously designated on its face as "exchange"
or the like and names a payee.  It may be  payable
to the order of (a)  the  maker  or drawer; or (b)
the  drawee;  or  (c) a payee who  is  not  maker,
drawer or  drawee;   or  (d)  two  or  more payees
together or in the alternative; or (e) an  estate,
trust or fund, in which  case it is payable to the
order of the representative of such estate,  trust
or fund or his successors; or (f) an office, or an
officer  by his title as such in which case it  is
payable to the principal  but the incumbent of the
office  or his successors may act as if he or they
were  the  holder;   or   (g)   a  partnership  or
unincorporated  association, in which case  it  is
payable to the  partnership or association and may
be  endorsed or transferred by any person  thereto
authorized.
    (2) An instrument not  payable to order is not
made  so  payable by such words as  "payable  upon
return of this instrument properly endorsed."
    (3) An instrument made  payable  both to order
and  to  bearer  is payable to  order  unless  the
bearer words are handwritten or typewritten.]
    (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.
    Sec.   11.  Section 42a-3-111 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [An  instrument is payable to bearer  when  by
its terms it is payable to (a) bearer or the order
of bearer; or (b) a specified person or bearer; or
(c) "cash" or the  order  of  "cash," or any other
indication  which does not purport to designate  a
specific payee.]
    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.
    Sec.   12.  Section 42a-3-112 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1) The negotiability of an instrument is not
affected by (a) the omission of a statement of any
consideration or of the place where the instrument
is drawn  or  payable;  or  (b)  a  statement that
collateral  has  been given to secure  obligations
either  on  the  instrument  or  otherwise  of  an
obligor  on the instrument or that in the case  of
default  on  those   obligations  the  holder  may
realize  on or dispose of the collateral; or (c) a
promise or power to maintain or protect collateral
or  to give additional collateral; or  (d) a  term
authorizing  a   confession   of  judgment  on the
instrument  if it is not paid when due; or  (e)  a
term purporting  to  waive  the benefit of any law
intended  for  the advantage or protection of  any
obligor; or (f) a term  in  a draft providing that
the  payee by endorsing or cashing it acknowledges
full satisfaction of an obligation  of the drawer;
or  (g) a statement in a draft drawn in a  set  of
parts as  provided  in  section  42a-3-801  to the
effect  that  the  order is effective only  if  no
other part has been honored.
    (2) Nothing in this section shall validate any
term which is otherwise illegal.]
    (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.
    Sec.  13.   Section  42a-3-113  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [An instrument  otherwise negotiable is within
this article even though it is under a seal.]
    (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
42a-4-401(c),   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.
    Sec.   14.  Section 42a-3-114 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1) The negotiability of an instrument is not
affected by the fact that is undated, antedated or
postdated.
    (2)  Where  an  instrument  is  antedated   or
postdated  the   time   when   it  is  payable  is
determined by the stated date if the instrument is
payable on demand or at a fixed period after date.
    (3)  Where  the  instrument  or  any signature
thereon  is  dated,   the date is presumed  to  be
correct.]
    IF AN INSTRUMENT CONTAINS CONTRADICTORY TERMS,
TYPEWRITTEN  TERMS  PREVAIL  OVER  PRINTED  TERMS,
HANDWRITTEN  TERMS  PREVAIL  OVER  BOTH, AND WORDS
PREVAIL OVER NUMBERS.
    Sec.   15.  Section 42a-3-115 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  When a paper whose contents at the  time
of signing show that it  is  intended to become an
instrument is signed while still incomplete in any
necessary  respect  it  cannot  be  enforced until
completed,  but when it is completed in accordance
with authority given it is effective as completed.
    (2)  If  the  completion  is  unauthorized the
rules   as  to  material  alteration  provided  in
section 42a-3-407 apply, even though the paper was
not  delivered  by the maker or drawer;   but  the
burden of  establishing  that  any  completion  is
unauthorized is on the party so asserting.]
    (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 42a-3-104, 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 42a-3-104,  BUT,   AFTER  COMPLETION,  THE
REQUIREMENTS  OF  SECTION 42a-3-104 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 42a-3-407.
    (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.
    Sec.   16.  Section 42a-3-116 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [An instrument payable to the order of two  or
more persons (a) if in  the alternative is payable
to   any  one  of  them  and  may  be  negotiated,
discharged or  enforced  by  any  of  them who has
possession of it; (b) if not in the alternative is
payable to all of  them  and  may  be  negotiated,
discharged or enforced only by all of them.]
    (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 42a-3-419(e)
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.
    Sec.  17.   Section  42a-3-117  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [An instrument made  payable to a named person
with  the addition of words describing him (a)  as
agent or officer of a  specified person is payable
to  his principal but the agent or officer may act
as if he  were  the  holder;   (b)  as  any  other
fiduciary  for  a specified person or  purpose  is
payable  to  the  payee  and  may  be  negotiated,
discharged  or  enforced by him; (c) in any  other
manner is payable to the payee unconditionally and
the   additional  words  are  without  effect   on
subsequent parties.]
    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.
    Sec.  18.   Section  42a-3-118  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [The   following    rules   apply   to   every
instrument:  (a) Where there is doubt whether  the
instrument is a  draft  or  a  note the holder may
treat it as either. A draft drawn on the drawer is
effective as a note. (b) Handwritten terms control
typewritten  and printed terms,   and  typewritten
control printed.  (c) Words control figures except
that  if the words are ambiguous figures  control.
(d) Unless  otherwise  specified  a  provision for
interest  means interest at the judgment  rate  at
the  place  of  payment  from   the  date  of  the
instrument,  or if it is undated from the date  of
issue.   (e)  Unless   the   instrument  otherwise
specifies  two or more persons who sign as  maker,
acceptor or drawer or  endorser  and  as a part of
the  same  transaction are jointly  and  severally
liable even though the  instrument  contains  such
words as "I promise to pay." (f) Unless  otherwise
specified consent to extension authorizes a single
extension for not longer than the original period.
A  consent   to   extension,    expressed  in  the
instrument,  is  binding on secondary parties  and
accommodation makers.  A  holder  may not exercise
his  option  to  extend  an  instrument  over  the
objection of a maker or  acceptor  or  other party
who  in accordance with section 42a-3-604  tenders
full payment when the instrument is due.]
    (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 TEN 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 TEN 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.
    Sec.   19.  Section 42a-3-119 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1) As between the obligor and his  immediate
obligee  or  any   transferee   the  terms  of  an
instrument  may  be modified or  affected  by  any
other written agreement  executed as a part of the
same  transaction,   except that a holder  in  due
course is not  affected  by  any limitation of his
rights   arising  out  of  the  separate   written
agreement if he had  no  notice  of the limitation
when he took the instrument.
    (2)  A separate agreement does not affect  the
negotiability of an instrument.]
    IN AN ACTION FOR  BREACH  OF AN OBLIGATION FOR
WHICH  A THIRD PERSON IS ANSWERABLE OVER  PURSUANT
TO THIS ARTICLE OR  ARTICLE  4,  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.
    Sec.  20.   Section  42a-3-201  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1) Transfer of  an  instrument  vests in the
transferee  such  rights  as  the  transferor  has
therein,  except that a transferee who has himself
been  a party to any fraud or illegality affecting
the instrument or who as a prior holder had notice
of  a defense or claim against it  cannot  improve
his position by taking  from a later holder in due
course.
    (2)  A transfer of a security interest  in  an
instrument  vests  the  foregoing  rights  in  the
transferee   to   the  extent  of   the   interest
transferred.
    (3) Unless otherwise  agreed  any transfer for
value of an instrument not then payable to  bearer
gives the transferee the  specifically enforceable
right  to have the unqualified endorsement of  the
transferor. Negotiation takes effect only when the
endorsement  is made and until that time there  is
no presumption that the transferee is the owner.]
    (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.
    Sec.  21.   Section  42a-3-202  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1)  Negotiation  is   the   transfer  of  an
instrument   in  such  form  that  the  transferee
becomes a holder.  If the instrument is payable to
order  it  is  negotiated  by  delivery  with  any
necessary endorsement; if  payable to bearer it is
negotiated by delivery.
    (2)  An endorsement must be written by  or  on
behalf of the holder and on the instrument or on a
paper  so  firmly affixed thereto as to  become  a
part thereof.
    (3)   An    endorsement   is   effective   for
negotiation   only  when  it  conveys  the  entire
instrument or any unpaid  residue.  If it purports
to  be  of  less  it operates  only  as a  partial
assignment.
    (4) Words  of  assignment,  condition, waiver,
guaranty,  limitation  or disclaimer of  liability
and the like  accompanying  an  endorsement do not
affect its character as an endorsement.]
    (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.
    Sec.   22.  Section 42a-3-203 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [Where  an  instrument is made  payable  to  a
person under a  misspelled  name or one other than
his own he may endorse in that name or his own  or
both; but signature in  both names may be required
by  a  person  paying  or  giving  value  for  the
instrument.]
    (a) AN INSTRUMENT  IS  TRANSFERRED  WHEN IT IS
DELIVERED  BY  A PERSON OTHER THAN ITS ISSUER  FOR
THE PURPOSE OF  GIVING  TO  THE  PERSON  RECEIVING
DELIVERY THE RIGHT TO ENFORCE THE INSTRUMENT.
    (b) TRANSFER OF AN INSTRUMENT, WHETHER OR  NOT
THE TRANSFER  IS  A  NEGOTIATION,   VESTS  IN  THE
TRANSFEREE ANY RIGHT OF THE TRANSFEROR TO  ENFORCE
THE INSTRUMENT, INCLUDING ANY RIGHT AS A HOLDER IN
DUE  COURSE,   BUT THE TRANSFEREE  CANNOT  ACQUIRE
RIGHTS OF A HOLDER  IN  DUE  COURSE BY A TRANSFER,
DIRECTLY  OR  INDIRECTLY,   FROM A HOLDER  IN  DUE
COURSE  IF  THE  TRANSFEREE  ENGAGED  IN  FRAUD OR
ILLEGALITY AFFECTING THE INSTRUMENT.
    (c) UNLESS OTHERWISE AGREED, IF AN  INSTRUMENT
IS TRANSFERRED FOR VALUE  AND  THE TRANSFEREE DOES
NOT BECOME A HOLDER BECAUSE OF LACK OF INDORSEMENT
BY  THE   TRANSFEROR,    THE   TRANSFEREE   HAS  A
SPECIFICALLY ENFORCEABLE RIGHT TO THE  UNQUALIFIED
INDORSEMENT OF THE  TRANSFEROR, BUT NEGOTIATION OF
THE   INSTRUMENT   DOES   NOT  OCCUR   UNTIL   THE
INDORSEMENT IS MADE.
    (d) IF A TRANSFEROR  PURPORTS TO TRANSFER LESS
THAN  THE  ENTIRE INSTRUMENT,  NEGOTIATION OF  THE
INSTRUMENT DOES NOT OCCUR.  THE TRANSFEREE OBTAINS
NO  RIGHTS  UNDER THIS ARTICLE AND  HAS  ONLY  THE
RIGHTS OF A PARTIAL ASSIGNEE.
    Sec.  23.   Section  42a-3-204  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1)  A  special   endorsement  specifies  the
person  to  whom  or to whose order it  makes  the
instrument  payable.    Any  instrument  specially
endorsed  becomes  payable  to the  order  of  the
special endorsee  and  may  be  further negotiated
only by his endorsement.
    (2)  An  endorsement  in  blank  specifies  no
particular  endorsee  and  may  consist  of a mere
signature.   An  instrument payable to  order  and
endorsed in blank  becomes  payable  to bearer and
may   be  negotiated  by  delivery   alone   until
specially endorsed.
    (3) The holder may convert a blank endorsement
into  a  special endorsement by writing  over  the
signature of the  endorser  in  blank any contract
consistent with the character of the endorsement.]
    (a)  "INDORSEMENT"  MEANS A  SIGNATURE,  OTHER
THAN THAT OF  A  SIGNER  AS  MAKER,   DRAWER,   OR
ACCEPTOR, THAT ALONE OR ACCOMPANIED BY OTHER WORDS
IS MADE ON  AN  INSTRUMENT  FOR THE PURPOSE OF (i)
NEGOTIATING   THE  INSTRUMENT,   (ii)  RESTRICTING
PAYMENT OF  THE  INSTRUMENT,   OR  (iii) INCURRING
INDORSER'S  LIABILITY  ON  THE  INSTRUMENT,    BUT
REGARDLESS  OF  THE   INTENT  OF  THE  SIGNER,   A
SIGNATURE   AND  ITS  ACCOMPANYING  WORDS  IS   AN
INDORSEMENT UNLESS THE  ACCOMPANYING WORDS,  TERMS
OF  THE  INSTRUMENT,  PLACE OF THE  SIGNATURE,  OR
OTHER  CIRCUMSTANCES  UNAMBIGUOUSLY  INDICATE THAT
THE  SIGNATURE  WAS MADE FOR A PURPOSE OTHER  THAN
INDORSEMENT.   FOR  THE   PURPOSE  OF  DETERMINING
WHETHER  A  SIGNATURE IS MADE ON AN INSTRUMENT,  A
PAPER AFFIXED TO THE  INSTRUMENT  IS A PART OF THE
INSTRUMENT.
    (b)  "INDORSER"  MEANS A PERSON WHO  MAKES  AN
INDORSEMENT.
    (c) FOR THE PURPOSE OF DETERMINING WHETHER THE
TRANSFEREE  OF  AN  INSTRUMENT  IS A  HOLDER,   AN
INDORSEMENT THAT TRANSFERS  A SECURITY INTEREST IN
THE  INSTRUMENT  IS EFFECTIVE  AS  AN  UNQUALIFIED
INDORSEMENT OF THE INSTRUMENT.
    (d) IF AN  INSTRUMENT  IS  PAYABLE TO A HOLDER
UNDER  A NAME THAT IS NOT THE NAME OF THE  HOLDER,
INDORSEMENT MAY BE MADE  BY THE HOLDER IN THE NAME
STATED  IN THE INSTRUMENT OR IN THE HOLDER'S  NAME
OR  BOTH,   BUT  SIGNATURE  IN  BOTH  NAMES MAY BE
REQUIRED   BY  A  PERSON  PAYING  OR  TAKING   THE
INSTRUMENT FOR VALUE OR COLLECTION.
    Sec.  24.   Section  42a-3-205  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [An endorsement  is  restrictive  which either
(a)  is  conditional; or (b) purports to  prohibit
further  transfer  of   the  instrument;   or  (c)
includes   the  words  "for   collection",    "for
deposit", "pay any bank", or like terms signifying
a  purpose  of  deposit  or  collection;   or  (d)
otherwise states that it is for the benefit or use
of the endorser or of another person.]
    (a) IF AN INDORSEMENT IS MADE BY THE HOLDER OF
AN INSTRUMENT, WHETHER  PAYABLE  TO  AN IDENTIFIED
PERSON  OR PAYABLE TO BEARER, AND THE  INDORSEMENT
IDENTIFIES  A  PERSON   TO   WHOM   IT  MAKES  THE
INSTRUMENT PAYABLE, IT IS A "SPECIAL INDORSEMENT".
WHEN SPECIALLY  INDORSED,   AN  INSTRUMENT BECOMES
PAYABLE  TO  THE  IDENTIFIED  PERSON  AND  MAY  BE
NEGOTIATED ONLY BY THE INDORSEMENT OF THAT PERSON.
THE  PRINCIPLES STATED IN SECTION 42a-3-110  APPLY
TO SPECIAL INDORSEMENTS.
    (b) IF AN INDORSEMENT IS MADE BY THE HOLDER OF
AN INSTRUMENT AND IS NOT A SPECIAL INDORSEMENT, IT
IS A "BLANK INDORSEMENT".  WHEN INDORSED IN BLANK,
AN INSTRUMENT BECOMES PAYABLE TO BEARER AND MAY BE
NEGOTIATED BY TRANSFER  OF  POSSESSION ALONE UNTIL
SPECIALLY INDORSED.
    (c) THE HOLDER MAY CONVERT A BLANK INDORSEMENT
THAT CONSISTS ONLY OF A  SIGNATURE  INTO A SPECIAL
INDORSEMENT  BY  WRITING,  ABOVE THE SIGNATURE  OF
THE INDORSER, WORDS IDENTIFYING THE PERSON TO WHOM
THE INSTRUMENT IS MADE PAYABLE.
    (d)    "ANOMALOUS   INDORSEMENT"   MEANS    AN
INDORSEMENT MADE BY A PERSON WHO IS NOT THE HOLDER
OF  THE INSTRUMENT.  AN ANOMALOUS INDORSEMENT DOES
NOT AFFECT THE MANNER IN WHICH  THE INSTRUMENT MAY
BE NEGOTIATED.
    Sec.   25.  Section 42a-3-206 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)   No  restrictive  endorsement   prevents
further transfer or negotiation of the instrument.
    (2) An  intermediary  bank,   or  a payor bank
which is not the depositary bank, is neither given
notice nor  otherwise  affected  by  a restrictive
endorsement   of  any  person  except  the  bank's
immediate transferor or the  person presenting for
payment.
    (3)  Except  for an  intermediary  bank,   any
transferee   under   an   endorsement   which   is
conditional    or   includes   the   words    "for
collection", "for  deposit",   "pay any bank",  or
like  terms must pay or apply any value  given  by
him for or  on  the  security  of  the  instrument
consistently  with  the  endorsement  and  to  the
extent that he does  so  he  becomes  a holder for
value.  In addition such transferee is a holder in
due course  if  he  otherwise  complies  with  the
requirements   of   section  42a-3-302   on   what
constitutes a holder in due course.
    (4) The first taker  under  an endorsement for
the benefit of the endorser or another person must
pay or apply any value given  by him for or on the
security  of the instrument consistently with  the
endorsement and to the  extent  that he does so he
becomes a holder for value. In addition such taker
is a holder in due course if he otherwise complies
with the requirements of section 42a-3-302 on what
constitutes a holder in due course. A later holder
for  value  is neither given notice nor  otherwise
affected by such restrictive endorsement unless he
has knowledge that a fiduciary or other person has
negotiated the  instrument  in any transaction for
his own benefit or otherwise in breach of duty.]
    (a)  AN  INDORSEMENT  LIMITING  PAYMENT  TO  A
PARTICULAR PERSON OR OTHERWISE PROHIBITING FURTHER
TRANSFER  OR NEGOTIATION OF THE INSTRUMENT IS  NOT
EFFECTIVE   TO   PREVENT   FURTHER   TRANSFER   OR
NEGOTIATION OF THE INSTRUMENT.
    (b) AN INDORSEMENT STATING A CONDITION TO  THE
RIGHT OF THE INDORSEE TO  RECEIVE PAYMENT DOES NOT
AFFECT  THE  RIGHT OF THE INDORSEE TO ENFORCE  THE
INSTRUMENT.  A  PERSON  PAYING  THE  INSTRUMENT OR
TAKING  IT FOR VALUE OR COLLECTION  MAY  DISREGARD
THE CONDITION, AND THE  RIGHTS  AND LIABILITIES OF
THAT  PERSON  ARE  NOT  AFFECTED  BY  WHETHER  THE
CONDITION HAS BEEN FULFILLED.
    (c) IF AN INSTRUMENT  BEARS AN INDORSEMENT (i)
DESCRIBED  IN  SECTION 42a-4-201(b),  or  (ii)  IN
BLANK OR TO A PARTICULAR BANK USING THE WORDS "FOR
DEPOSIT",   "FOR  COLLECTION",   OR  OTHER   WORDS
INDICATING  A  PURPOSE  OF  HAVING  THE INSTRUMENT
COLLECTED  BY  A  BANK FOR THE INDORSER OR  FOR  A
PARTICULAR ACCOUNT, THE FOLLOWING RULES APPLY:
    (1) A PERSON OTHER  THAN A BANK, WHO PURCHASES
THE  INSTRUMENT  WHEN  SO  INDORSED  CONVERTS  THE
INSTRUMENT   UNLESS   THE   AMOUNT   PAID  FOR THE
INSTRUMENT IS RECEIVED BY THE INDORSER OR  APPLIED
CONSISTENTLY WITH THE INDORSEMENT.
    (2)  A  DEPOSITARY  BANK  THAT  PURCHASES  THE
INSTRUMENT  OR  TAKES IT FOR  COLLECTION  WHEN  SO
INDORSED CONVERTS THE INSTRUMENT UNLESS THE AMOUNT
PAID BY THE BANK WITH RESPECT TO THE INSTRUMENT IS
RECEIVED BY THE INDORSER  OR  APPLIED CONSISTENTLY
WITH THE INDORSEMENT.
    (3)  A PAYOR BANK THAT IS ALSO THE  DEPOSITARY
BANK OR THAT TAKES THE  INSTRUMENT  FOR  IMMEDIATE
PAYMENT OVER THE COUNTER FROM A PERSON OTHER  THAN
A COLLECTING BANK  CONVERTS  THE INSTRUMENT UNLESS
THE PROCEEDS OF THE INSTRUMENT ARE RECEIVED BY THE
INDORSER  OR   APPLIED   CONSISTENTLY   WITH   THE
INDORSEMENT.
    (4) EXCEPT AS OTHERWISE PROVIDED IN  PARAGRAPH
(3),   A  PAYOR  BANK  OR  INTERMEDIARY  BANK  MAY
DISREGARD THE INDORSEMENT AND IS NOT LIABLE IF THE
PROCEEDS OF THE INSTRUMENT ARE NOT RECEIVED BY THE
INDORSER   OR   APPLIED  CONSISTENTLY   WITH   THE
INDORSEMENT.
    (d)  EXCEPT  FOR  AN  INDORSEMENT  COVERED  BY
SUBSECTION   (c),   IF  AN  INSTRUMENT  BEARS   AN
INDORSEMENT USING WORDS TO THE EFFECT THAT PAYMENT
IS  TO BE MADE TO THE INDORSEE AS AGENT,  TRUSTEE,
OR OTHER FIDUCIARY FOR THE BENEFIT OF THE INDORSER
OR ANOTHER PERSON, THE FOLLOWING RULES APPLY:
    (1)  UNLESS  THERE  IS  NOTICE  OF  BREACH  OF
FIDUCIARY DUTY AS PROVIDED IN SECTION 42a-3-307, A
PERSON  WHO  PURCHASES  THE  INSTRUMENT  FROM  THE
INDORSEE OR TAKES THE INSTRUMENT FROM THE INDORSEE
FOR  COLLECTION OR PAYMENT MAY PAY THE PROCEEDS OF
PAYMENT OR THE VALUE  GIVEN  FOR THE INSTRUMENT TO
THE   INDORSEE  WITHOUT  REGARD  TO  WHETHER   THE
INDORSEE  VIOLATES  A   FIDUCIARY   DUTY   TO  THE
INDORSER.
    (2) A SUBSEQUENT TRANSFEREE OF THE  INSTRUMENT
OR PERSON WHO PAYS THE INSTRUMENT IS NEITHER GIVEN
NOTICE  NOR OTHERWISE AFFECTED BY THE  RESTRICTION
IN THE INDORSEMENT  UNLESS THE TRANSFEREE OR PAYOR
KNOWS THAT THE FIDUCIARY DEALT WITH THE INSTRUMENT
OR ITS PROCEEDS IN BREACH OF FIDUCIARY DUTY.
    (e)  THE  PRESENCE  OF  AN  INSTRUMENT  OF  AN
INDORSEMENT TO WHICH THIS SECTION APPLIES DOES NOT
PREVENT  A  PURCHASER   OF   THE  INSTRUMENT  FROM
BECOMING  A HOLDER IN DUE COURSE OF THE INSTRUMENT
UNLESS  THE   PURCHASER   IS   A  CONVERTER  UNDER
SUBSECTION  (c)  OR  HAS NOTICE  OR  KNOWLEDGE  OF
BREACH OF FIDUCIARY DUTY  AS  STATED IN SUBSECTION
(d).
    (f) IN AN ACTION TO ENFORCE THE OBLIGATION  OF
A PARTY TO PAY THE  INSTRUMENT,  THE OBLIGOR HAS A
DEFENSE IF PAYMENT WOULD VIOLATE AN INDORSEMENT TO
WHICH THIS SECTION APPLIES  AND THE PAYMENT IS NOT
PERMITTED BY THIS SECTION.
    Sec.   26.  Section 42a-3-207 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1) Negotiation is effective to transfer  the
instrument although the negotiation is (a) made by
an  infant, a corporation exceeding its powers, or
any other person without capacity; or (b) obtained
by  fraud,  duress or mistake of any kind; or  (c)
part of an illegal  transaction;   or  (d) made in
breach of duty.
    (2)  Except as against a subsequent holder  in
due course such  negotiation  is in an appropriate
case  subject to rescission, the declaration of  a
constructive trust or  any  other remedy permitted
by law.]
    REACQUISITION OF AN INSTRUMENT OCCURS IF IT IS
TRANSFERRED TO A FORMER HOLDER,  BY NEGOTIATION OR
OTHERWISE.   A  FORMER HOLDER WHO  REACQUIRES  THE
INSTRUMENT MAY CANCEL INDORSEMENTS  MADE AFTER THE
REACQUIRER   FIRST   BECAME  A   HOLDER   OF   THE
INSTRUMENT.   IF  THE   CANCELLATION   CAUSES  THE
INSTRUMENT  TO BE PAYABLE TO THE REACQUIRER OR  TO
BEARER,    THE   REACQUIRER   MAY   NEGOTIATE  THE
INSTRUMENT.   AN  INDORSER  WHOSE  INDORSEMENT  IS
CANCELLED  IS  DISCHARGED,   AND  THE DISCHARGE IS
EFFECTIVE AGAINST ANY SUBSEQUENT HOLDER.
    Sec.   27.  Section 42a-3-301 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [The holder of an instrument whether or not he
is the owner  may  transfer  or  negotiate it and,
except  as otherwise provided in section 42a-3-603
on  payment  or  satisfaction,   discharge  it  or
enforce payment in his own name.]
    "PERSON  ENTITLED  TO ENFORCE"  AN  INSTRUMENT
MEANS (i) THE HOLDER OF  THE  INSTRUMENT,   (ii) A
NONHOLDER IN POSSESSION OF THE INSTRUMENT WHO  HAS
THE RIGHTS OF A HOLDER,  OR  (iii) A PERSON NOT IN
POSSESSION  OF THE INSTRUMENT WHO IS  ENTITLED  TO
ENFORCE THE INSTRUMENT  PURSUANT  TO SECTION 35 OF
THIS ACT OR SECTION 42a-3-418(d).  A PERSON MAY BE
A PERSON ENTITLED TO  ENFORCE  THE INSTRUMENT EVEN
THOUGH  THE  PERSON  IS  NOT  THE  OWNER  OF   THE
INSTRUMENT OR IS  IN  WRONGFUL  POSSESSION  OF THE
INSTRUMENT.
    Sec.   28.  Section 42a-3-302 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  A holder in due course is a  holder  who
takes the  instrument  (a)  for value;  and (b) in
good  faith;   and (c) without notice that  it  is
overdue or has been  dishonored  or of any defense
against or claim to it on the part of any person.
    (2) A payee may be a holder in due course.
    (3)  A holder does not become a holder in  due
course of an instrument  (a)  by purchase of it at
judicial sale or by taking it under legal process;
or (b) by acquiring it  in  taking over an estate;
or  (c)  by  purchasing  it  as  part  of a   bulk
transaction not in  regular  course of business of
the transferor.
    (4) A purchaser of a limited interest can be a
holder in due  course  only  to  the extent of the
interest purchased.]
    (a)  SUBJECT  TO SUBSECTION  (c)  AND  SECTION
42a-3-106(d),  "HOLDER  IN  DUE  COURSE" MEANS THE
HOLDER OF AN INSTRUMENT IF:
    (1)  THE INSTRUMENT WHEN ISSUED OR  NEGOTIATED
TO THE HOLDER DOES NOT BEAR SUCH APPARENT EVIDENCE
OF  FORGERY OR ALTERATION OR IS NOT  OTHERWISE  SO
IRREGULAR OR INCOMPLETE  AS  TO CALL INTO QUESTION
ITS AUTHENTICITY; AND
    (2)  THE  HOLDER TOOK THE INSTRUMENT  (i)  FOR
VALUE, (ii) IN GOOD  FAITH,   (iii) WITHOUT NOTICE
THAT  THE  INSTRUMENT  IS  OVERDUE  OR  HAS   BEEN
DISHONORED OR  THAT  THERE  IS  AN UNCURED DEFAULT
WITH  RESPECT  TO PAYMENT  OF  ANOTHER  INSTRUMENT
ISSUED AS PART OF THE  SAME  SERIES,  (iv) WITHOUT
NOTICE    THAT   THE   INSTRUMENT   CONTAINS    AN
UNAUTHORIZED SIGNATURE  OR  HAS BEEN ALTERED,  (v)
WITHOUT  NOTICE  OF  ANY CLAIM TO  THE  INSTRUMENT
DESCRIBED IN SECTION  42a-3-306,  AND (vi) WITHOUT
NOTICE  THAT  ANY PARTY HAS A DEFENSE OR CLAIM  IN
RECOUPMENT DESCRIBED IN SECTION 42a-3-305(a).
    (b) NOTICE OF DISCHARGE OF A PARTY, OTHER THAN
DISCHARGE  IN  AN INSOLVENCY  PROCEEDING,  IS  NOT
NOTICE OF  A  DEFENSE  UNDER  SUBSECTION  (a), BUT
DISCHARGE IS EFFECTIVE AGAINST A PERSON WHO BECAME
A  HOLDER  IN  DUE   COURSE  WITH  NOTICE  OF  THE
DISCHARGE.    PUBLIC  FILING  OR  RECORDING  OF  A
DOCUMENT DOES NOT OF ITSELF CONSTITUTE NOTICE OF A
DEFENSE,  CLAIM  IN RECOUPMENT,  OR CLAIM  TO  THE
INSTRUMENT.
    (c) EXCEPT  TO  THE  EXTENT  A  TRANSFEROR  OR
PREDECESSOR IN INTEREST HAS RIGHTS AS A HOLDER  IN
DUE COURSE, A PERSON  DOES NOT ACQUIRE RIGHTS OF A
HOLDER IN DUE COURSE OF AN INSTRUMENT TAKEN (i) BY
LEGAL PROCESS  OR  BY  PURCHASE  IN  AN EXECUTION,
BANKRUPTCY,    OR  CREDITOR'S  SALE   OR   SIMILAR
PROCEEDING,  (ii)  BY  PURCHASE  AS PART OF A BULK
TRANSACTION  NOT IN ORDINARY COURSE OF BUSINESS OF
THE TRANSFEROR,   OR  (iii)  AS  THE  SUCCESSOR IN
INTEREST TO AN ESTATE OR OTHER ORGANIZATION.
    (d)  IF,  UNDER SECTION  42a-3-303(a)(1),  THE
PROMISE OF PERFORMANCE  THAT  IS THE CONSIDERATION
FOR  AN INSTRUMENT HAS BEEN  PARTIALLY  PERFORMED,
THE HOLDER MAY  ASSERT  RIGHTS  AS A HOLDER IN DUE
COURSE  OF THE INSTRUMENT ONLY TO THE FRACTION  OF
THE AMOUNT PAYABLE UNDER  THE  INSTRUMENT EQUAL TO
THE  VALUE OF THE PARTIAL PERFORMANCE  DIVIDED  BY
THE VALUE OF THE PROMISED PERFORMANCE.
    (e) IF (i) THE PERSON  ENTITLED  TO ENFORCE AN
INSTRUMENT  HAS  ONLY A SECURITY INTEREST  IN  THE
INSTRUMENT AND (ii) THE PERSON  OBLIGED TO PAY THE
INSTRUMENT HAS A DEFENSE, CLAIM IN RECOUPMENT,  OR
CLAIM  TO  THE  INSTRUMENT  THAT  MAY  BE ASSERTED
AGAINST   THE  PERSON  WHO  GRANTED  THE  SECURITY
INTEREST,  THE  PERSON  ENTITLED  TO  ENFORCE  THE
INSTRUMENT  MAY ASSERT RIGHTS AS A HOLDER  IN  DUE
COURSE  ONLY  TO  AN   AMOUNT  PAYABLE  UNDER  THE
INSTRUMENT  WHICH,  AT THE TIME OF ENFORCEMENT  OF
THE INSTRUMENT, DOES NOT EXCEED  THE AMOUNT OF THE
UNPAID OBLIGATION SECURED.
    (f)  TO BE EFFECTIVE, NOTICE MUST BE  RECEIVED
AT A TIME AND IN A MANNER  THAT GIVES A REASONABLE
OPPORTUNITY TO ACT ON IT.
    (g)   THIS  SECTION  IS  SUBJECT  TO  ANY  LAW
LIMITING STATUS  AS  A  HOLDER  IN  DUE  COURSE IN
PARTICULAR CLASSES OF TRANSACTIONS.
    Sec.   29.  Section 42a-3-303 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [A  holder takes the instrument for value  (a)
to the extent that the  agreed  consideration  has
been  performed  or that  he  acquires a  security
interest in or a lien on  the instrument otherwise
than  by  legal process; or (b) when he takes  the
instrument in  payment  of  or  as security for an
antecedent claim against any person whether or not
the  claim  is  due;   or  (c)  when  he  gives  a
negotiable   instrument   for  it  or   makes   an
irrevocable commitment to a third person.]
    (a) AN INSTRUMENT IS ISSUED OR TRANSFERRED FOR
VALUE IF:
    (1)  THE INSTRUMENT IS ISSUED  OR  TRANSFERRED
FOR A PROMISE  OF  PERFORMANCE,  TO THE EXTENT THE
PROMISE HAS BEEN PERFORMED;
    (2)   THE   TRANSFEREE   ACQUIRES A   SECURITY
INTEREST OR OTHER  LIEN  IN  THE  INSTRUMENT OTHER
THAN A LIEN OBTAINED BY JUDICIAL PROCEEDING;
    (3) THE INSTRUMENT IS ISSUED OR TRANSFERRED AS
PAYMENT OF, OR  AS  SECURITY  FOR,   AN ANTECEDENT
CLAIM AGAINST ANY PERSON, WHETHER OR NOT THE CLAIM
IS DUE;
    (4) THE INSTRUMENT IS ISSUED OR TRANSFERRED IN
EXCHANGE FOR A NEGOTIABLE INSTRUMENT; OR
    (5) THE INSTRUMENT IS ISSUED OR TRANSFERRED IN
EXCHANGE  FOR  THE  INCURRING  OF  AN  IRREVOCABLE
OBLIGATION  TO A THIRD PARTY BY THE PERSON  TAKING
THE INSTRUMENT.
    (b)  "CONSIDERATION"  MEANS  ANY CONSIDERATION
SUFFICIENT  TO  SUPPORT  A SIMPLE  CONTRACT.   THE
DRAWER OR MAKER OF AN INSTRUMENT  HAS A DEFENSE IF
THE INSTRUMENT IS ISSUED WITHOUT CONSIDERATION. IF
AN  INSTRUMENT  IS   ISSUED   FOR   A  PROMISE  OF
PERFORMANCE,  THE  ISSUER  HAS A  DEFENSE  TO  THE
EXTENT PERFORMANCE OF  THE  PROMISE IS DUE AND THE
PROMISE HAS NOT BEEN PERFORMED.  IF AN  INSTRUMENT
IS ISSUED FOR VALUE AS  STATED  IN SUBSECTION (a),
THE INSTRUMENT IS ALSO ISSUED FOR CONSIDERATION.
    Sec.   30.  Section 42a-3-304 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  The purchaser has notice of a  claim  or
defense if (a)  the  instrument  is so incomplete,
bears   such   visible  evidence  of  forgery   or
alteration, or  is  otherwise  so  irregular as to
call   into  question  its  validity,   terms   or
ownership or  to  create  an  ambiguity  as to the
party to pay; or (b) the purchaser has notice that
the obligation of any  party  is voidable in whole
or  in  part,   or  that  all  parties  have  been
discharged.
    (2)  The  purchaser  has  notice  of  a  claim
against the instrument when he has knowledge  that
a  fiduciary  has  negotiated  the  instrument  in
payment  of or as security for his own debt or  in
any transaction for his  own  benefit or otherwise
in breach of duty.
    (3)   The   purchaser  has  notice   that   an
instrument is overdue if he has reason to know (a)
that  any part of the principal amount is  overdue
or that there is an uncured  default in payment of
another instrument of the same series; or (b) that
acceleration of the instrument  has been made;  or
(c)  that he is taking a demand  instrument  after
demand has been made  or  more  than  a reasonable
length of time after its issue.  A reasonable time
for a check drawn  and  payable  within the states
and  territories  of  the United  States  and  the
District  of  Columbia  is  presumed  to be thirty
days.
    (4) Knowledge of the following facts does  not
of itself give the  purchaser  notice of a defense
or  claim (a) that the instrument is antedated  or
postdated; (b) that it was issued or negotiated in
return for an executory promise or accompanied  by
a separate  agreement,   unless  the purchaser has
notice that a defense or claim has arisen from the
terms thereof; (c) that  any  party has signed for
accommodation;  (d) that an incomplete  instrument
has  been  completed,   unless  the  purchaser has
notice  of  any improper completion; (e) that  any
person negotiating  the  instrument  is  or  was a
fiduciary;   (f)  that there has been  default  in
payment  of  interest  on  the  instrument  or  in
payment of any other instrument, except one of the
same series.
    (5) The filing or recording of a document does
not   of  itself  constitute  notice  within   the
provisions of this  article  to a person who would
otherwise be a holder in due course.
    (6) To be effective notice must be received at
such  time  and  in  such  manner  as  to  give  a
reasonable opportunity to act on it.]
    (a)  AN INSTRUMENT PAYABLE ON  DEMAND  BECOMES
OVERDUE AT THE EARLIEST OF THE FOLLOWING TIMES:
    (1)  ON  THE  DAY  AFTER  THE  DAY  DEMAND FOR
PAYMENT IS DULY MADE;
    (2) IF THE INSTRUMENT IS A CHECK, NINETY  DAYS
AFTER ITS DATE; OR
    (3) IF THE INSTRUMENT IS NOT A CHECK, WHEN THE
INSTRUMENT  HAS BEEN OUTSTANDING FOR A  PERIOD  OF
TIME AFTER ITS  DATE  WHICH  IS  UNREASONABLY LONG
UNDER THE CIRCUMSTANCES OF THE PARTICULAR CASE  IN
LIGHT OF THE NATURE OF THE INSTRUMENT AND USAGE OF
THE TRADE.
    (b) WITH RESPECT TO AN INSTRUMENT PAYABLE AT A
DEFINITE TIME THE FOLLOWING RULES APPLY:
    (1) IF THE PRINCIPAL IS PAYABLE IN INSTALMENTS
AND  A  DUE DATE HAS NOT  BEEN  ACCELERATED,   THE
INSTRUMENT BECOMES  OVERDUE UPON DEFAULT UNDER THE
INSTRUMENT  FOR NONPAYMENT OF AN INSTALMENT,   AND
THE INSTRUMENT REMAINS  OVERDUE  UNTIL THE DEFAULT
IS CURED.
    (2)   IF  THE  PRINCIPAL  IS  NOT  PAYABLE  IN
INSTALMENTS  AND  THE   DUE   DATE  HAS  NOT  BEEN
ACCELERATED, THE INSTRUMENT BECOMES OVERDUE ON THE
DAY AFTER THE DUE DATE.
    (3) IF A DUE  DATE  WITH  RESPECT TO PRINCIPAL
HAS  BEEN  ACCELERATED,   THE  INSTRUMENT  BECOMES
OVERDUE ON THE DAY AFTER THE ACCELERATED DUE DATE.
    (c) UNLESS THE DUE  DATE OF PRINCIPAL HAS BEEN
ACCELERATED, AN INSTRUMENT DOES NOT BECOME OVERDUE
IF THERE IS DEFAULT IN  PAYMENT OF INTEREST BUT NO
DEFAULT IN PAYMENT OF PRINCIPAL.
    Sec.   31.  Section 42a-3-305 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [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
(e)  any other discharge of which the  holder  has
notice when he takes the instrument.]
    (a) EXCEPT AS  STATED  IN  SUBSECTION (b), THE
RIGHT  TO ENFORCE THE OBLIGATION OF A PARTY TO PAY
AN INSTRUMENT IS SUBJECT TO THE FOLLOWING:
    (1) A DEFENSE  OF  THE  OBLIGOR  BASED  ON (i)
INFANCY  OF  THE  OBLIGOR TO THE EXTENT  IT  IS  A
DEFENSE TO A SIMPLE CONTRACT, (ii) DURESS, LACK OF
LEGAL  CAPACITY, OR ILLEGALITY OF THE  TRANSACTION
WHICH,  UNDER OTHER LAW,  NULLIFIES THE OBLIGATION
OF  THE  OBLIGOR,   (iii) FRAUD THAT  INDUCED  THE
OBLIGOR  TO  SIGN  THE   INSTRUMENT  WITH  NEITHER
KNOWLEDGE  NOR REASONABLE OPPORTUNITY TO LEARN  OF
ITS CHARACTER  OR  ITS  ESSENTIAL  TERMS,  OR (iv)
DISCHARGE    OF   THE   OBLIGOR   IN    INSOLVENCY
PROCEEDINGS;
    (2) A DEFENSE OF THE OBLIGOR STATED IN ANOTHER
SECTION  OF  THIS  ARTICLE  OR A  DEFENSE  OF  THE
OBLIGOR THAT  WOULD  BE  AVAILABLE  IF  THE PERSON
ENTITLED  TO ENFORCE THE INSTRUMENT WERE ENFORCING
A RIGHT TO PAYMENT UNDER A SIMPLE CONTRACT; AND
    (3) A  CLAIM  IN  RECOUPMENT  OF  THE  OBLIGOR
AGAINST  THE ORIGINAL PAYEE OF THE  INSTRUMENT  IF
THE CLAIM AROSE  FROM  THE  TRANSACTION  THAT GAVE
RISE  TO  THE INSTRUMENT;  BUT THE  CLAIM  OF  THE
OBLIGOR MAY BE  ASSERTED  AGAINST  A TRANSFEREE OF
THE  INSTRUMENT ONLY TO REDUCE THE AMOUNT OWING ON
THE INSTRUMENT AT THE TIME THE ACTION IS BROUGHT.
    (b) THE RIGHT OF  A  HOLDER  IN  DUE COURSE TO
ENFORCE  THE  OBLIGATION  OF A PARTY  TO  PAY  THE
INSTRUMENT IS SUBJECT TO  DEFENSES  OF THE OBLIGOR
STATED IN SUBSECTION (a)(1), BUT IS NOT SUBJECT TO
DEFENSES  OF  THE  OBLIGOR  STATED  IN  SUBSECTION
(a)(2)   OR   CLAIMS  IN  RECOUPMENT   STATED   IN
SUBSECTION (a)(3) AGAINST  A PERSON OTHER THAN THE
HOLDER.
    (c) EXCEPT AS STATED IN SUBSECTION (d), IN  AN
ACTION TO ENFORCE THE OBLIGATION OF A PARTY TO PAY
THE INSTRUMENT, THE OBLIGOR MAY NOT ASSERT AGAINST
THE PERSON ENTITLED  TO  ENFORCE  THE INSTRUMENT A
DEFENSE,   CLAIM  IN RECOUPMENT,  OR CLAIM TO  THE
INSTRUMENT (SECTION 42a-3-306)  OF ANOTHER PERSON,
BUT THE OTHER PERSON'S CLAIM TO THE INSTRUMENT MAY
BE ASSERTED BY THE OBLIGOR  IF THE OTHER PERSON IS
JOINED  IN THE ACTION AND PERSONALLY  ASSERTS  THE
CLAIM AGAINST THE PERSON  ENTITLED  TO ENFORCE THE
INSTRUMENT.  AN OBLIGOR IS NOT OBLIGED TO PAY  THE
INSTRUMENT IF  THE  PERSON  SEEKING ENFORCEMENT OF
THE INSTRUMENT DOES NOT HAVE RIGHTS OF A HOLDER IN
DUE  COURSE  AND  THE   OBLIGOR  PROVES  THAT  THE
INSTRUMENT IS A LOST OR STOLEN INSTRUMENT.
    (d) IN AN ACTION TO ENFORCE THE OBLIGATION  OF
AN ACCOMMODATION PARTY  TO PAY AN INSTRUMENT,  THE
ACCOMMODATION  PARTY MAY ASSERT AGAINST THE PERSON
ENTITLED TO ENFORCE THE INSTRUMENT  ANY DEFENSE OR
CLAIM IN RECOUPMENT UNDER SUBSECTION (a) THAT  THE
ACCOMMODATED PARTY COULD ASSERT AGAINST THE PERSON
ENTITLED  TO  ENFORCE THE INSTRUMENT,  EXCEPT  THE
DEFENSES OF DISCHARGE IN  INSOLVENCY  PROCEEDINGS,
INFANCY, AND LACK OF LEGAL CAPACITY.
    Sec.   32.  Section 42a-3-306 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [Unless  he has the rights of a holder in  due
course any person takes the  instrument subject to
(a)  all  valid claims to it on the  part  of  any
person; and (b)  all  defenses  of any party which
would  be  available  in  an  action  on a  simple
contract; and (c) the defenses  of want or failure
of consideration, nonperformance of any  condition
precedent, nondelivery,  or delivery for a special
purpose;   and (d) the defense that he or a person
through whom he holds  the  instrument acquired it
by  theft, or that payment or satisfaction to such
holder would be  inconsistent  with the terms of a
restrictive  endorsement.  The claim of any  third
person  to  the   instrument   is   not  otherwise
available as a defense to any party liable thereon
unless the third person himself defends the action
for such party.]
    A  PERSON TAKING AN INSTRUMENT, OTHER  THAN  A
PERSON HAVING RIGHTS OF A HOLDER IN DUE COURSE, IS
SUBJECT  TO  A CLAIM OF A PROPERTY  OR  POSSESSORY
RIGHT IN THE INSTRUMENT OR ITS PROCEEDS, INCLUDING
A  CLAIM  TO RESCIND A NEGOTIATION AND TO  RECOVER
THE INSTRUMENT OR ITS  PROCEEDS.   A PERSON HAVING
RIGHTS OF A HOLDER IN DUE COURSE TAKES FREE OF THE
CLAIM TO THE INSTRUMENT.
    Sec.  33.   Section  42a-3-307  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1)   Unless   specifically   denied  in  the
pleadings  each  signature  on  an  instrument  is
admitted. When the effectiveness of a signature is
put  in issue (a) the burden of establishing it is
on the party claiming under the signature; but (b)
the   signature  is  presumed  to  be  genuine  or
authorized except where  the  action is to enforce
the  obligation of a purported signer who has died
or become incompetent before proof is required.
    (2)   When    signatures   are   admitted   or
established, production of the instrument entitles
a holder to recover  on  it  unless  the defendant
establishes a defense.
    (3) After it is shown that a defense exists  a
person  claiming  the  rights  of  a holder in due
course  has the burden of establishing that he  or
some  person  under   whom  he  claims  is  in all
respects a holder in due course.]
    (a) IN THIS SECTION:
    (1)  "FIDUCIARY"  MEANS  AN  AGENT,   TRUSTEE,
PARTNER, CORPORATE  OFFICER OR DIRECTOR,  OR OTHER
REPRESENTATIVE OWING A FIDUCIARY DUTY WITH RESPECT
TO AN INSTRUMENT.
    (2) "REPRESENTED  PERSON" MEANS THE PRINCIPAL,
BENEFICIARY,  PARTNERSHIP,  CORPORATION,  OR OTHER
PERSON TO WHOM THE DUTY STATED IN PARAGRAPH (1) IS
OWED.
    (b)  IF  (i)  AN INSTRUMENT IS  TAKEN  FROM  A
FIDUCIARY FOR PAYMENT OR COLLECTION  OR FOR VALUE,
(ii)  THE  TAKER HAS KNOWLEDGE  OF  THE  FIDUCIARY
STATUS OF THE FIDUCIARY, AND (iii) THE REPRESENTED
PERSON  MAKE  A  CLAIM TO THE  INSTRUMENT  OR  ITS
PROCEEDS ON THE BASIS  THAT THE TRANSACTION OF THE
FIDUCIARY  IS  A  BREACH OF  FIDUCIARY  DUTY,  THE
FOLLOWING RULES APPLY:
    (1) NOTICE OF BREACH  OF FIDUCIARY DUTY BY THE
FIDUCIARY   IS   NOTICE  OF  THE  CLAIM   OF   THE
REPRESENTED PERSON.
    (2) IN THE CASE OF  AN  INSTRUMENT  PAYABLE TO
THE  REPRESENTED PERSON OR THE FIDUCIARY AS  SUCH,
THE TAKER HAS NOTICE  OF  THE  BREACH OF FIDUCIARY
DUTY  IF THE INSTRUMENT IS (i) TAKEN IN PAYMENT OF
OR AS SECURITY FOR A DEBT KNOWN BY THE TAKER TO BE
THE PERSONAL DEBT OF THE FIDUCIARY, (ii) TAKEN  IN
A TRANSACTION KNOWN  BY  THE  TAKER  TO BE FOR THE
PERSONAL  BENEFIT  OF  THE  FIDUCIARY,   OR  (iii)
DEPOSITED TO AN ACCOUNT  OTHER  THAN AN ACCOUNT OF
THE  FIDUCIARY,  AS  SUCH,  OR AN ACCOUNT  OF  THE
REPRESENTED PERSON.
    (3)  IF  AN   INSTRUMENT   IS  ISSUED  BY  THE
REPRESENTED PERSON OR THE FIDUCIARY AS SUCH,   AND
MADE PAYABLE  TO  THE  FIDUCIARY  PERSONALLY,  THE
TAKER  DOES  NOT  HAVE  NOTICE OF  THE  BREACH  OF
FIDUCIARY  DUTY  UNLESS  THE  TAKER  KNOWS  OF THE
BREACH OF FIDUCIARY DUTY.
    (4)   IF  AN  INSTRUMENT  IS  ISSUED  BY   THE
REPRESENTED PERSON OR  THE  FIDUCIARY AS SUCH,  TO
THE  TAKER AS PAYEE, THE TAKER HAS NOTICE  OF  THE
BREACH OF FIDUCIARY DUTY  IF THE INSTRUMENT IS (i)
TAKEN  IN  PAYMENT  OF OR AS SECURITY  FOR A  DEBT
KNOWN BY THE TAKER TO BE THE  PERSONAL DEBT OF THE
FIDUCIARY,   (ii) TAKEN IN A TRANSACTION KNOWN  BY
THE TAKER TO BE FOR THE  PERSONAL  BENEFIT  OF THE
FIDUCIARY,  OR (iii) DEPOSITED TO AN ACCOUNT OTHER
THAN AN ACCOUNT OF THE FIDUCIARY,  AS SUCH,  OR AN
ACCOUNT OF THE REPRESENTED PERSON.
    Sec.  34.  (NEW) (a) In an action with respect
to  an  instrument,   the  authenticity  of,   and
authority   to   make,   each  signature  on   the
instrument is admitted unless  specifically denied
in  the pleadings.  If the validity of a signature
is  denied  in  the   pleadings,   the  burden  of
establishing  validity  is on the person  claiming
validity, but  the  signature  is  presumed  to be
authentic  and authorized unless the action is  to
enforce the liability of the  purported signer and
the  signer is dead or incompetent at the time  of
trial of the issue of  validity  of the signature.
If  an action to enforce the instrument is brought
against a person as the undisclosed principal of a
person who signed the instrument as a party to the
instrument,   the  plaintiff  has  the  burden  of
establishing  that the defendant is liable on  the
instrument as a  represented  person under section
42a-3-402(a) of the general statutes.
    (b) If the validity of signatures is  admitted
or proved and there is  compliance with subsection
(a),   a  plaintiff  producing the  instrument  is
entitled  to  payment   if  the  plaintiff  proves
entitlement   to  enforce  the  instrument   under
section 42a-3-301 of the general statutes,  unless
the   defendant  proves  a  defense  or  claim  in
recoupment. If a defense or claim in recoupment is
proved,  the right to payment of the plaintiff  is
subject to the  defense  or  claim,  except to the
extent the plaintiff proves that the plaintiff has
rights of a holder  in  due  course  which are not
subject to the defense or claim.
    Sec.  35. (NEW) (a) A person not in possession
of  an  instrument  is  entitled  to  enforce  the
instrument  if (i) the person was in possession of
the instrument  and  entitled  to  enforce it when
loss  of  possession occurred,  (ii) the  loss  of
possession was not the result of a transfer by the
person  or a lawful seizure, and (iii) the  person
cannot   reasonably   obtain   possession  of  the
instrument  because the instrument was  destroyed,
its whereabouts cannot  be determined, or it is in
the  wrongful possession of an unknown person or a
person that cannot be found  or is not amenable to
service of process.
    (b)   A  person  seeking  enforcement  of   an
instrument  under  subsection  (a)  must prove the
terms  of the instrument and the person's right to
enforce the  instrument.   If  that proof is made,
section  34 of this act applies to the case as  if
the person  seeking  enforcement  had produced the
instrument.   The court may not enter judgment  in
favor of the person  seeking enforcement unless it
finds   that  the  person  required  to  pay   the
instrument is  adequately  protected  against loss
that  might occur by reason of a claim by  another
person  to  enforce  the   instrument.    Adequate
protection  may  be  provided  by  any  reasonable
means.
    Sec.  36.  (NEW) (a)  Unless otherwise agreed,
if a certified check, cashier's check, or teller's
check is taken for an  obligation,  the obligation
is  discharged to the same extent discharge  would
result if an amount of  money  equal to the amount
of  the  instrument were taken in payment  of  the
obligation.  Discharge  of the obligation does not
affect  any liability that the obligor may have as
an indorser of the instrument.
    (b)  Unless  otherwise  agreed  and  except as
provided  in  subsection  (a),  if a  note  or  an
uncertified check is  taken for an obligation, the
obligation  is  suspended to the same  extent  the
obligation would  be  discharged  if  an amount of
money  equal to the amount of the instrument  were
taken, and the following rules apply:
    (1) In  the  case  of  an  uncertified  check,
suspension  of  the  obligation  continues   until
dishonor of  the  check  or  until  it  is paid or
certified.   Payment or certification of the check
results in  discharge  of  the  obligation  to the
extent of the amount of the check.
    (2)  In the case of a note, suspension of  the
obligation continues until dishonor of the note or
until  it is paid.  Payment of the note results in
discharge of the  obligation  to the extent of the
payment.
    (3)  Except as provided in paragraph  (4),  if
the check or note is dishonored and the obligee of
the  obligation for which the instrument was taken
is the person entitled to  enforce the instrument,
the  obligee may enforce either the instrument  or
the obligation.  In the case of an instrument of a
third person which is negotiated to the obligee by
the  obligor,   discharge  of  the  obligor on the
instrument also discharges the obligation.
    (4)  If  the person entitled  to  enforce  the
instrument taken for  an  obligation  is  a person
other  than  the  obligee,  the  obligee  may  not
enforce   the   obligation   to   the  extent  the
obligation  is suspended.  If the obligee  is  the
person entitled to  enforce  the instrument but no
longer  has possession of it because it was  lost,
stolen, or destroyed,   the  obligation may not be
enforced  to  the extent of the amount payable  on
the instrument, and to  that  extent the obligee's
rights   against   the  obligor  are  limited   to
enforcement of the instrument.
    (c) If an instrument  other than one described
in   subsection  (a)  or  (b)  is  taken  for   an
obligation,   the  effect  is  (i)  that stated in
subsection (a) if the instrument is one on which a
bank is liable as maker or  acceptor, or (ii) that
stated in subsection (b) in any other case.
    Sec.  37. (NEW) (a) If a person against whom a
claim is asserted proves  that  (i) that person in
good  faith tendered an instrument to the claimant
as full satisfaction of the claim, (ii) the amount
of the claim was unliquidated or subject to a bona
fide dispute,   and  (iii)  the  claimant obtained
payment   of   the  instrument,    the   following
subsections apply.
    (b) Unless subsection  (c)  applies, the claim
is discharged if the person against whom the claim
is  asserted  proves  that  the  instrument  or an
accompanying  written  communication  contained  a
conspicuous  statement   to  the  effect  that the
instrument  was  tendered as full satisfaction  of
the claim.
    (c) Subject to  subsection (d), a claim is not
discharged  under subsection (b) if either of  the
following applies:
    (1) The claimant, if  an  organization, proves
that  (i)  within  a reasonable  time  before  the
tender,  the claimant sent a conspicuous statement
to  the person against whom the claim is  asserted
that  communications  concerning  disputed  debts,
including   an   instrument   tendered   as   full
satisfaction  of  a  debt,   are  to  be sent to a
designated person, office, or place, and (ii)  the
instrument or  accompanying  communication was not
received  by that designated person,  office,   or
place.
    (2)  The   claimant,    whether   or   not  an
organization, proves that within ninety days after
payment of the  instrument,  the claimant tendered
repayment  of the amount of the instrument to  the
person against whom the  claim  is asserted.  This
paragraph  does  not apply if the claimant  is  an
organization that sent a statement  complying with
paragraph (1)(i).
    (d)  A  claim  is  discharged  if  the  person
against whom the  claim  is  asserted  proves that
within a reasonable time before collection of  the
instrument  was  initiated,   the claimant,  or an
agent of the claimant having direct responsibility
with respect to the disputed obligation, knew that
the  instrument was tendered in full  satisfaction
of the claim.
    Sec.  38.   Section  42a-3-401  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1) No  person  is  liable  on  an instrument
unless his signature appears thereon.
    (2)  A signature is made by use of  any  name,
including any  trade  or  assumed  name,   upon an
instrument, or by any word or mark used in lieu of
a written signature.]
    (a) A PERSON IS  NOT  LIABLE  ON AN INSTRUMENT
UNLESS  (i) THE PERSON SIGNED THE INSTRUMENT,   OR
(ii) THE  PERSON  IS  REPRESENTED  BY  AN AGENT OR
REPRESENTATIVE  WHO SIGNED THE INSTRUMENT AND  THE
SIGNATURE IS BINDING  ON  THE  REPRESENTED  PERSON
UNDER SECTION 42a-3-402.
    (b) A SIGNATURE MAY BE MADE (i) MANUALLY OR BY
MEANS OF A DEVICE OR MACHINE,  AND (ii) BY THE USE
OF  ANY NAME,  INCLUDING A TRADE OR ASSUMED  NAME,
OR BY A WORD, MARK, OR SYMBOL  EXECUTED OR ADOPTED
BY A PERSON WITH PRESENT INTENTION TO AUTHENTICATE
A WRITING.
    Sec.  39.   Section  42a-3-402  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [Unless the instrument  clearly indicates that
a  signature is made in some other capacity it  is
an endorsement.]
    (a) IF A PERSON  ACTING, OR PURPORTING TO ACT,
AS A REPRESENTATIVE SIGNS AN INSTRUMENT BY SIGNING
EITHER THE NAME OF THE  REPRESENTED  PERSON OR THE
NAME  OF  THE SIGNER,  THE REPRESENTED  PERSON  IS
BOUND BY THE  SIGNATURE  TO  THE  SAME  EXTENT THE
REPRESENTED PERSON WOULD BE BOUND IF THE SIGNATURE
WERE ON A  SIMPLE  CONTRACT.   IF  THE REPRESENTED
PERSON   IS   BOUND,    THE   SIGNATURE   OF   THE
REPRESENTATIVE IS THE "AUTHORIZED SIGNATURE OF THE
REPRESENTED  PERSON" AND THE REPRESENTED PERSON IS
LIABLE  ON   THE   INSTRUMENT,    WHETHER  OR  NOT
IDENTIFIED IN THE INSTRUMENT.
    (b) IF A REPRESENTATIVE SIGNS THE NAME OF  THE
REPRESENTATIVE TO AN  INSTRUMENT AND THE SIGNATURE
IS  AN  AUTHORIZED  SIGNATURE OF  THE  REPRESENTED
PERSON, THE FOLLOWING RULES APPLY:
    (1)  IF  THE  FORM  OF   THE  SIGNATURE  SHOWS
UNAMBIGUOUSLY THAT THE SIGNATURE IS MADE ON BEHALF
OF THE REPRESENTED PERSON WHO IS IDENTIFIED IN THE
INSTRUMENT,  THE  REPRESENTATIVE IS NOT LIABLE  ON
THE INSTRUMENT.
    (2) SUBJECT  TO  SUBSECTION  (c),   IF (i) THE
FORM OF THE SIGNATURE DOES NOT SHOW  UNAMBIGUOUSLY
THAT THE SIGNATURE  IS  MADE  IN  A REPRESENTATIVE
CAPACITY  OR  (ii) THE REPRESENTED PERSON  IS  NOT
IDENTIFIED IN THE  INSTRUMENT,  THE REPRESENTATIVE
IS  LIABLE  ON THE INSTRUMENT TO A HOLDER  IN  DUE
COURSE THAT TOOK  THE  INSTRUMENT  WITHOUT  NOTICE
THAT  THE  REPRESENTATIVE WAS NOT INTENDED  TO  BE
LIABLE ON  THE  INSTRUMENT.   WITH  RESPECT TO ANY
OTHER  PERSON, THE REPRESENTATIVE IS LIABLE ON THE
INSTRUMENT UNLESS THE  REPRESENTATIVE  PROVES THAT
THE   ORIGINAL   PARTIES   DID  NOT   INTEND   THE
REPRESENTATIVE TO BE LIABLE ON THE INSTRUMENT.
    (c) IF A  REPRESENTATIVE SIGNS THE NAME OF THE
REPRESENTATIVE   AS  DRAWER  OF A  CHECK   WITHOUT
INDICATION OF THE  REPRESENTATIVE  STATUS  AND THE
CHECK   IS   PAYABLE  FROM  AN  ACCOUNT   OF   THE
REPRESENTED PERSON WHO IS IDENTIFIED ON THE CHECK,
THE  SIGNER  IS  NOT LIABLE ON THE  CHECK  IF  THE
SIGNATURE  IS  AN  AUTHORIZED   SIGNATURE  OF  THE
REPRESENTED PERSON.
    Sec.   40.  Section 42a-3-403 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  A signature may be made by an  agent  or
other representative, and his authority to make it
may   be   established  as  in  other   cases   of
representation.  No particular form of appointment
is necessary to establish such authority.
    (2) An authorized representative who signs his
own  name  to  an  instrument  (a)  is  personally
obligated  if  the  instrument neither  names  the
person   represented    nor    shows    that   the
representative    signed    in a    representative
capacity;  (b)  except  as  otherwise  established
between  the  immediate  parties,   is  personally
obligated  if  the  instrument  names  the  person
represented   but   does   not   show   that   the
representative    signed    in   a  representative
capacity,  or if the instrument does not name  the
person   represented   but   does   show  that the
representative    signed    in a    representative
capacity.
    (3) Except as  otherwise  established the name
of  an  organization preceded or followed  by  the
name and office of an  authorized  individual is a
signature made in a representative capacity.]
    (a) UNLESS OTHERWISE PROVIDED IN THIS  ARTICLE
OR  ARTICLE  4,   AN   UNAUTHORIZED  SIGNATURE  IS
INEFFECTIVE   EXCEPT  AS  THE  SIGNATURE  OF   THE
UNAUTHORIZED SIGNER  IN  FAVOR  OF A PERSON WHO IN
GOOD  FAITH  PAYS THE INSTRUMENT OR TAKES  IT  FOR
VALUE.  AN UNAUTHORIZED SIGNATURE  MAY BE RATIFIED
FOR ALL PURPOSES OF THIS ARTICLE.
    (b)  IF THE SIGNATURE OF MORE THAN ONE  PERSON
IS REQUIRED TO CONSTITUTE THE AUTHORIZED SIGNATURE
OF   AN  ORGANIZATION,   THE  SIGNATURE   OF   THE
ORGANIZATION   IS   UNAUTHORIZED   IF  ONE  OF THE
REQUIRED SIGNATURES IS LACKING.
    (c)  THE  CIVIL  OR CRIMINAL  LIABILITY  OF  A
PERSON WHO MAKES AN UNAUTHORIZED  SIGNATURE IS NOT
AFFECTED  BY ANY PROVISION OF THIS  ARTICLE  WHICH
MAKES THE UNAUTHORIZED SIGNATURE EFFECTIVE FOR THE
PURPOSES OF THIS ARTICLE.
    Sec.   41.  Section 42a-3-404 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  Any  unauthorized  signature  is  wholly
inoperative as that  of  the  person whose name is
signed  unless he ratifies it or is precluded from
denying it; but it  operates  as  the signature of
the unauthorized signer in favor of any person who
in good faith pays the instrument  or takes it for
value.
    (2) Any unauthorized signature may be ratified
for  all   purposes   of   this   article.    Such
ratification  does not of itself affect any rights
of  the  person   ratifying   against  the  actual
signer.]
    (a)  IF AN IMPOSTER,  BY USE OF THE  MAILS  OR
OTHERWISE, INDUCES THE  ISSUER OF AN INSTRUMENT TO
ISSUE  THE  INSTRUMENT  TO THE IMPOSTER, OR  TO  A
PERSON ACTING IN  CONCERT  WITH  THE IMPOSTER,  BY
IMPERSONATING  THE  PAYEE OF THE INSTRUMENT  OR  A
PERSON  AUTHORIZED  TO  ACT  FOR  THE  PAYEE,   AN
INDORSEMENT OF THE INSTRUMENT BY ANY PERSON IN THE
NAME OF THE PAYEE IS EFFECTIVE  AS THE INDORSEMENT
OF  THE  PAYEE IN FAVOR OF A PERSON WHO,  IN  GOOD
FAITH, PAYS THE  INSTRUMENT  OR TAKES IT FOR VALUE
OR FOR COLLECTION.
    (b) IF (i) A PERSON WHOSE INTENT DETERMINES TO
WHOM   AN   INSTRUMENT    IS    PAYABLE   (SECTION
42a-3-110(a)  OR (b)) DOES NOT INTEND  THE  PERSON
IDENTIFIED AS PAYEE  TO  HAVE  ANY INTEREST IN THE
INSTRUMENT, OR (ii) THE PERSON IDENTIFIED AS PAYEE
OF AN INSTRUMENT  IS  A  FICTITIOUS  PERSON,   THE
FOLLOWING  RULES  APPLY  UNTIL THE  INSTRUMENT  IS
NEGOTIATED BY SPECIAL INDORSEMENT:
    (1) ANY PERSON IN POSSESSION OF THE INSTRUMENT
IS ITS HOLDER.
    (2)  AN INDORSEMENT BY ANY PERSON IN THE  NAME
OF THE PAYEE STATED IN THE INSTRUMENT IS EFFECTIVE
AS  THE  INDORSEMENT OF THE PAYEE IN  FAVOR  OF  A
PERSON WHO, IN GOOD  FAITH, PAYS THE INSTRUMENT OR
TAKES IT FOR VALUE OR FOR COLLECTION.
    (c)   UNDER   SUBSECTION  (a)  OR   (b),    AN
INDORSEMENT IS MADE IN THE  NAME OF A PAYEE IF (i)
IT IS MADE IN A NAME SUBSTANTIALLY SIMILAR TO THAT
OF THE PAYEE OR (ii) THE  INSTRUMENT,   WHETHER OR
NOT INDORSED, IS DEPOSITED IN A DEPOSITORY BANK TO
AN ACCOUNT IN A NAME SUBSTANTIALLY SIMILAR TO THAT
OF THE PAYEE.
    (d)  WITH  RESPECT TO AN INSTRUMENT  TO  WHICH
SUBSECTION (a) OR (b) APPLIES,  IF A PERSON PAYING
THE  INSTRUMENT  OR  TAKING IT FOR  VALUE  OR  FOR
COLLECTION FAILS  TO  EXERCISE  ORDINARY  CARE  IN
PAYING  OR TAKING THE INSTRUMENT AND THAT  FAILURE
SUBSTANTIALLY  CONTRIBUTES  TO LOSS RESULTING FROM
PAYMENT  OF THE INSTRUMENT, THE PERSON BEARING THE
LOSS  MAY  RECOVER  FROM  THE  PERSON  FAILING  TO
EXERCISE  ORDINARY CARE TO THE EXTENT THE  FAILURE
TO EXERCISE ORDINARY CARE CONTRIBUTED TO THE LOSS.
    Sec.  42.   Section  42a-3-405  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1) An endorsement by  any person in the name
of  a named payee is effective if (a) an  impostor
by use of the mails or  otherwise  has induced the
maker or drawer to issue the instrument to him  or
his confederate in the name of the payee; or (b) a
person  signing  as  or on behalf  of a  maker  or
drawer intends  the  payee  to have no interest in
the instrument; or (c) an agent or employee of the
maker or drawer has  supplied him with the name of
the  payee  intending the latter to have  no  such
interest.
    (2) Nothing in this  section  shall affect the
criminal  or  civil  liability of  the  person  so
endorsing.]
    (a) IN THIS SECTION:
    (1)   "EMPLOYEE"   INCLUDES   AN   INDEPENDENT
CONTRACTOR   AND   EMPLOYEE  OF   AN   INDEPENDENT
CONTRACTOR RETAINED BY THE EMPLOYER.
    (2) "FRAUDULENT  INDORSEMENT" MEANS (i) IN THE
CASE  OF AN INSTRUMENT PAYABLE TO THE EMPLOYER,  A
FORGED INDORSEMENT  PURPORTING  TO  BE THAT OF THE
EMPLOYER,  OR  (ii) IN THE CASE OF  AN  INSTRUMENT
WITH RESPECT TO WHICH THE  EMPLOYER IS THE ISSUER,
A FORGED INDORSEMENT PURPORTING TO BE THAT OF  THE
PERSON IDENTIFIED AS PAYEE.
    (3)     "RESPONSIBILITY"    WITH    RESPECT TO
INSTRUMENTS MEANS AUTHORITY (i) TO SIGN OR INDORSE
INSTRUMENTS ON  BEHALF  OF  THE  EMPLOYER, (ii) TO
PROCESS  INSTRUMENTS RECEIVED BY THE EMPLOYER  FOR
BOOKKEEPING PURPOSES,  FOR  DEPOSIT TO AN ACCOUNT,
OR  FOR  OTHER DISPOSITION,  (iii) TO  PREPARE  OR
PROCESS INSTRUMENTS FOR  ISSUE  IN THE NAME OF THE
EMPLOYER,  (iv) TO SUPPLY INFORMATION  DETERMINING
THE NAMES OR ADDRESSES OF PAYEES OF INSTRUMENTS TO
BE  ISSUED  IN THE NAME OF THE EMPLOYER,   (v)  TO
CONTROL  THE   DISPOSITION  OF  INSTRUMENTS  TO BE
ISSUED IN THE NAME OF THE EMPLOYER, OR (vi) TO ACT
OTHERWISE   WITH   RESPECT   TO  INSTRUMENTS  IN A
RESPONSIBLE  CAPACITY.  "RESPONSIBILITY" DOES  NOT
INCLUDE AUTHORITY THAT  MERELY  ALLOWS AN EMPLOYEE
TO   HAVE  ACCESS  TO  INSTRUMENTS  OR  BLANK   OR
INCOMPLETE INSTRUMENT  FORMS THAT ARE BEING STORED
OR TRANSPORTED OR ARE PART OF INCOMING OR OUTGOING
MAIL, OR SIMILAR ACCESS.
    (b) FOR THE PURPOSE OF  DETERMINING THE RIGHTS
AND  LIABILITIES OF A PERSON WHO,  IN GOOD  FAITH,
PAYS AN INSTRUMENT  OR  TAKES  IT FOR VALUE OR FOR
COLLECTION,  IF AN EMPLOYER ENTRUSTED AN  EMPLOYEE
WITH RESPONSIBILITY WITH RESPECT TO THE INSTRUMENT
AND  THE  EMPLOYEE OR A PERSON ACTING  IN  CONCERT
WITH THE EMPLOYEE MAKES  A  FRAUDULENT INDORSEMENT
OF THE INSTRUMENT, THE INDORSEMENT IS EFFECTIVE AS
THE  INDORSEMENT  OF   THE   PERSON  TO  WHOM  THE
INSTRUMENT IS PAYABLE IF IT IS MADE IN THE NAME OF
THAT PERSON.  IF THE  PERSON PAYING THE INSTRUMENT
OR  TAKING IT FOR VALUE OR FOR COLLECTION FAILS TO
EXERCISE ORDINARY  CARE  IN  PAYING  OR TAKING THE
INSTRUMENT    AND   THAT   FAILURE   SUBSTANTIALLY
CONTRIBUTES TO LOSS RESULTING  FROM THE FRAUD, THE
PERSON  BEARING  THE  LOSS MAY  RECOVER  FROM  THE
PERSON FAILING TO  EXERCISE  ORDINARY  CARE TO THE
EXTENT  THE  FAILURE  TO  EXERCISE  ORDINARY  CARE
CONTRIBUTED TO THE LOSS.
    (c) UNDER  SUBSECTION  (b),  AN INDORSEMENT IS
MADE  IN  THE  NAME  OF  THE  PERSON  TO  WHOM  AN
INSTRUMENT IS PAYABLE IF (i)  IT IS MADE IN A NAME
SUBSTANTIALLY  SIMILAR TO THE NAME OF THAT  PERSON
OR (ii) THE INSTRUMENT,  WHETHER  OR NOT INDORSED,
IS DEPOSITED IN A DEPOSITARY BANK TO AN ACCOUNT IN
A NAME SUBSTANTIALLY  SIMILAR  TO THE NAME OF THAT
PERSON.
    Sec.   43.  Section 42a-3-406 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [Any    person   who   by    his    negligence
substantially contributes to a material alteration
of   the  instrument  or  to  the  making  of   an
unauthorized signature is precluded from asserting
the  alteration  or  lack of authority  against  a
holder in due course or against  a drawee or other
payor who pays the instrument in good faith and in
accordance   with   the    reasonable   commercial
standards of the drawee's or payor's business.]
    (a)   A  PERSON  WHOSE  FAILURE  TO   EXERCISE
ORDINARY  CARE  SUBSTANTIALLY  CONTRIBUTES  TO  AN
ALTERATION OF AN INSTRUMENT OR TO THE MAKING OF  A
FORGED SIGNATURE ON  AN  INSTRUMENT  IS  PRECLUDED
FROM  ASSERTING  THE  ALTERATION  OR  THE  FORGERY
AGAINST A PERSON WHO,   IN  GOOD  FAITH,  PAYS THE
INSTRUMENT   OR   TAKES  IT  FOR  VALUE   OR   FOR
COLLECTION.
    (b)  UNDER  SUBSECTION  (a),   IF  THE  PERSON
ASSERTING   THE   PRECLUSION  FAILS  TO   EXERCISE
ORDINARY CARE IN PAYING  OR  TAKING THE INSTRUMENT
AND  THAT  FAILURE  SUBSTANTIALLY  CONTRIBUTES  TO
LOSS,  THE LOSS IS  ALLOCATED  BETWEEN  THE PERSON
PRECLUDED AND THE PERSON ASSERTING THE  PRECLUSION
ACCORDING TO THE  EXTENT  TO  WHICH THE FAILURE OF
EACH  TO EXERCISE ORDINARY CARE CONTRIBUTED TO THE
LOSS.
    (c)  UNDER  SUBSECTION  (a),   THE  BURDEN  OF
PROVING  FAILURE TO EXERCISE ORDINARY CARE  IS  ON
THE  PERSON  ASSERTING   THE   PRECLUSION.   UNDER
SUBSECTION  (b), THE BURDEN OF PROVING FAILURE  TO
EXERCISE ORDINARY CARE IS ON THE PERSON PRECLUDED.
    Sec.  44.   Section  42a-3-407  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1)  Any  alteration  of   an  instrument  is
material  which changes the contract of any  party
thereto in any respect, including  any such change
in (a) the number or relations of the parties;  or
(b) an incomplete  instrument,   by  completing it
otherwise  than as authorized; or (c) the  writing
as signed, by adding to it or by removing any part
of it.
    (2)   As  against  any  person  other  than  a
subsequent holder in due course  (a) alteration by
the  holder which is both fraudulent and  material
discharges any  party  whose  contract  is thereby
changed  unless that party assents or is precluded
from  asserting   the   defense;    (b)  no  other
alteration discharges any party and the instrument
may be enforced  according  to its original tenor,
or  as to incomplete instruments according to  the
authority given.
    (3) A subsequent  holder  in due course may in
all cases enforce the instrument according to  its
original tenor, and when  an incomplete instrument
has   been  completed,   he  may  enforce  it   as
completed.]
    (a)  "ALTERATION"  MEANS  (i)  AN UNAUTHORIZED
CHANGE IN AN INSTRUMENT THAT PURPORTS TO MODIFY IN
ANY RESPECT THE OBLIGATION  OF A PARTY, OR (ii) AN
UNAUTHORIZED ADDITION OF WORDS OR NUMBERS OR OTHER
CHANGE TO AN INCOMPLETE INSTRUMENT RELATING TO THE
OBLIGATION OF A PARTY.
    (b)  EXCEPT AS PROVIDED IN SUBSECTION (c),  AN
ALTERATION FRAUDULENTLY  MADE  DISCHARGES  A PARTY
WHOSE  OBLIGATION  IS AFFECTED BY  THE  ALTERATION
UNLESS THAT  PARTY  ASSENTS  OR  IS PRECLUDED FROM
ASSERTING  THE  ALTERATION.  NO  OTHER  ALTERATION
DISCHARGES A  PARTY,   AND  THE  INSTRUMENT MAY BE
ENFORCED ACCORDING TO ITS ORIGINAL TERMS.
    (c)   A   PAYOR  BANK  OR  DRAWEE   PAYING   A
FRAUDULENTLY ALTERED INSTRUMENT OR A PERSON TAKING
IT  FOR VALUE, IN GOOD FAITH AND WITHOUT NOTICE OF
THE ALTERATION, MAY ENFORCE RIGHTS WITH RESPECT TO
THE  INSTRUMENT  (i)  ACCORDING  TO  ITS  ORIGINAL
TERMS, OR  (ii)  IN  THE  CASE  OF  AN  INCOMPLETE
INSTRUMENT  ALTERED  BY  UNAUTHORIZED  COMPLETION,
ACCORDING TO ITS TERMS AS COMPLETED.
    Sec.  45.   Section  42a-3-408  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [Want or failure of consideration is a defense
as  against any person not having the rights of  a
holder  in  due  course  as  provided  in  section
42a-3-305,   except  that  no   consideration   is
necessary for an  instrument or obligation thereon
given   in  payment  of  or  as  security  for  an
antecedent obligation of any kind. Nothing in this
section  shall  be taken to displace  any  statute
outside  this  title  under  which  a  promise  is
enforceable  notwithstanding  lack or  failure  of
consideration. Partial failure of consideration is
a defense pro tanto whether or not the failure  is
in an ascertained or liquidated amount.]
    A CHECK  OR  OTHER  DRAFT  DOES  NOT OF ITSELF
OPERATE  AS AN ASSIGNMENT OF FUNDS IN THE HANDS OF
THE DRAWEE  AVAILABLE  FOR  ITS  PAYMENT,  AND THE
DRAWEE  IS NOT LIABLE ON THE INSTRUMENT UNTIL  THE
DRAWEE ACCEPTS IT.
    Sec.  46.   Section  42a-3-409  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1) A check or other draft does not of itself
operate as an assignment of any funds in the hands
of the drawee available  for  its payment, and the
drawee  is  not liable on the instrument until  he
accepts it.
    (2) Nothing in this  section  shall affect any
liability  in contract, tort or otherwise  arising
from any letter of  credit  or other obligation or
representation which is not an acceptance.]
    (a)  "ACCEPTANCE"  MEANS THE  DRAWEE'S  SIGNED
AGREEMENT TO PAY A DRAFT AS PRESENTED.  IT MUST BE
WRITTEN  ON  THE  DRAFT AND  MAY  CONSIST  OF  THE
DRAWEE'S SIGNATURE ALONE.   ACCEPTANCE MAY BE MADE
AT   ANY   TIME   AND   BECOMES   EFFECTIVE   WHEN
NOTIFICATION PURSUANT TO INSTRUCTIONS  IS GIVEN OR
THE ACCEPTED DRAFT IS DELIVERED FOR THE PURPOSE OF
GIVING RIGHTS ON THE ACCEPTANCE TO ANY PERSON.
    (b) A DRAFT MAY  BE  ACCEPTED  ALTHOUGH IT HAS
NOT  BEEN  SIGNED  BY THE  DRAWER,   IS  OTHERWISE
INCOMPLETE, IS OVERDUE, OR HAS BEEN DISHONORED.
    (c) IF A DRAFT  IS  PAYABLE  AT A FIXED PERIOD
AFTER  SIGHT  AND THE ACCEPTOR FAILS TO  DATE  THE
ACCEPTANCE, THE HOLDER MAY COMPLETE THE ACCEPTANCE
BY SUPPLYING A DATE IN GOOD FAITH.
    (d)  "CERTIFIED CHECK" MEANS A CHECK  ACCEPTED
BY THE BANK ON WHICH IT IS  DRAWN.  ACCEPTANCE MAY
BE  MADE  AS  STATED IN SUBSECTION  (a)  OR  BY  A
WRITING ON  THE  CHECK  WHICH  INDICATES  THAT THE
CHECK IS CERTIFIED.  THE DRAWEE OF A CHECK HAS  NO
OBLIGATION TO CERTIFY  THE  CHECK,  AND REFUSAL TO
CERTIFY IS NOT DISHONOR OF THE CHECK.
    Sec.   47.  Section 42a-3-410 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)   Acceptance   is  the  drawee's   signed
engagement to honor the  draft  as  presented.  It
must  be written on the draft, and may consist  of
his signature alone.   It  becomes  operative when
completed by delivery or notification.
    (2)  A draft may be accepted although  it  has
not been signed  by  the  drawer  or  is otherwise
incomplete or is overdue or has been dishonored.
    (3)  Where  the draft is  payable  at a  fixed
period after sight and  the acceptor fails to date
his  acceptance  the  holder may  complete  it  by
supplying a date in good faith.]
    (a) IF THE TERMS OF A DRAWEE'S ACCEPTANCE VARY
FROM  THE  TERMS OF THE DRAFT  AS  PRESENTED,  THE
HOLDER MAY REFUSE  THE  ACCEPTANCE  AND  TREAT THE
DRAFT AS DISHONORED.  IN THAT CASE, THE DRAWEE MAY
CANCEL THE ACCEPTANCE.
    (b) THE TERMS OF A  DRAFT ARE NOT VARIED BY AN
ACCEPTANCE TO PAY AT A PARTICULAR BANK OR PLACE IN
THE UNITED STATES,   UNLESS  THE ACCEPTANCE STATES
THAT THE DRAFT IS TO BE PAID ONLY AT THAT BANK  OR
PLACE.
    (c) IF THE  HOLDER  ASSENTS  TO  AN ACCEPTANCE
VARYING  THE TERMS OF A DRAFT,  THE OBLIGATION  OF
EACH DRAWER AND INDORSER  THAT  DOES NOT EXPRESSLY
ASSENT TO THE ACCEPTANCE IS DISCHARGED.
    Sec.   48.  Section 42a-3-411 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  Certification of a check is  acceptance.
Where a holder procures  certification  the drawer
and all prior endorsers are discharged.
    (2)  Unless  otherwise agreed a  bank  has  no
obligation to certify a check.
    (3)  A  bank  may   certify   a  check  before
returning it for lack of proper endorsement. If it
does so the drawer is discharged.]
    (a) IN THIS  SECTION,  "OBLIGATED  BANK" MEANS
THE ACCEPTOR OF A CERTIFIED CHECK OR THE ISSUER OF
A CASHIER'S CHECK  OR  TELLER'S  CHECK BOUGHT FROM
THE ISSUER.
    (b)  IF  THE  OBLIGATED  BANK  WRONGFULLY  (i)
REFUSES TO PAY  A  CASHIER'S  CHECK  OR  CERTIFIED
CHECK,  (ii) STOPS PAYMENT OF A TELLER'S CHECK, OR
(iii) REFUSES TO PAY A DISHONORED  TELLER'S CHECK,
THE  PERSON  ASSERTING THE RIGHT  TO  ENFORCE  THE
CHECK IS ENTITLED TO COMPENSATION FOR EXPENSES AND
LOSS OF INTEREST RESULTING FROM THE NONPAYMENT AND
MAY RECOVER CONSEQUENTIAL DAMAGES IF THE OBLIGATED
BANK  REFUSES  TO  PAY AFTER RECEIVING  NOTICE  OF
PARTICULAR   CIRCUMSTANCES   GIVING   RISE  TO THE
DAMAGES.
    (c)  EXPENSES OR CONSEQUENTIAL  DAMAGES  UNDER
SUBSECTION (b) ARE NOT  RECOVERABLE IF THE REFUSAL
OF  THE  OBLIGATED BANK TO PAY OCCURS BECAUSE  (i)
THE BANK SUSPENDS  PAYMENTS,   (ii)  THE OBLIGATED
BANK  ASSERTS A CLAIM OR DEFENSE OF THE BANK  THAT
IT HAS RESONABLE GROUNDS  TO  BELIEVE IS AVAILABLE
AGAINST   THE  PERSON  ENTITLED  TO  ENFORCE   THE
INSTRUMENT,   (iii)   THE   OBLIGATED  BANK  HAS A
REASONABLE  DOUBT  WHETHER  THE  PERSON  DEMANDING
PAYMENT IS  THE  PERSON  ENTITLED  TO  ENFORCE THE
INSTRUMENT, OR (iv) PAYMENT IS PROHIBITED BY LAW.
    Sec.   49.  Section 42a-3-412 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  Where the drawee's proffered  acceptance
in any manner varies  the  draft  as presented the
holder  may  refuse the acceptance and  treat  the
draft as dishonored in  which  case  the drawee is
entitled to have his acceptance cancelled.
    (2)  The terms of the draft are not varied  by
an acceptance to pay  at  any  particular  bank or
place  in the United States, unless the acceptance
states that the draft is  to  be paid only at such
bank or place.
    (3) Where the holder assents to an  acceptance
varying the terms  of  the  draft  each drawer and
endorser  who  does not  affirmatively  assent  is
discharged.]
    THE ISSUER OF A  NOTE  OR  CASHIER'S  CHECK OR
OTHER DRAFT DRAWN ON THE DRAWER IS OBLIGED TO  PAY
THE INSTRUMENT (i)  ACCORDING  TO ITS TERMS AT THE
TIME IT WAS ISSUED OR, IF NOT ISSUED, AT THE  TIME
IT FIRST CAME INTO POSSESSION OF A HOLDER, OR (ii)
IF  THE  ISSUER SIGNED AN  INCOMPLETE  INSTRUMENT,
ACCORDING TO  ITS  TERMS  WHEN  COMPLETED,  TO THE
EXTENT STATED IN SECTIONS 42a-3-115 AND 42a-3-407.
THE OBLIGATION IS  OWED  TO  A  PERSON ENTITLED TO
ENFORCE THE INSTRUMENT OR TO AN INDORSER WHO  PAID
THE INSTRUMENT UNDER SECTION 42a-3-415.
    Sec.  50.   Section  42a-3-413  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1) The maker  or  acceptor  engages  that he
will pay the instrument according to its tenor  at
the  time  of  his   engagement  or  as  completed
pursuant   to  section  42a-3-115  on   incomplete
instruments.
    (2) The drawer engages  that  upon dishonor of
the draft and any necessary notice of dishonor  or
protest he will pay the amount of the draft to the
holder  or  to any endorser who takes it up.   The
drawer may  disclaim  this  liability  by  drawing
without recourse.
    (3) By making, drawing or accepting the  party
admits as against all subsequent parties including
the drawee the existence of the payee and his then
capacity to endorse.]
    (a) THE ACCEPTOR OF A  DRAFT IS OBLIGED TO PAY
THE  DRAFT (i) ACCORDING TO ITS TERMS AT THE  TIME
IT WAS ACCEPTED, EVEN THOUGH THE ACCEPTANCE STATES
THAT THE DRAFT IS PAYABLE "AS ORIGINALLY DRAWN" OR
EQUIVALENT TERMS,  (ii)  IF  THE ACCEPTANCE VARIES
THE TERMS OF THE DRAFT, ACCORDING TO THE TERMS  OF
THE DRAFT AS VARIED, OR (iii) IF THE ACCEPTANCE IS
OF  A  DRAFT  THAT IS  AN  INCOMPLETE  INSTRUMENT,
ACCORDING TO  ITS  TERMS  WHEN  COMPLETED,  TO THE
EXTENT STATED IN SECTIONS 42a-3-115 AND 42a-3-407.
THE OBLIGATION IS  OWED  TO  A  PERSON ENTITLED TO
ENFORCE THE DRAFT OR TO THE DRAWER OR AN  INDORSER
WHO PAID  THE  DRAFT  UNDER  SECTION  42a-3-414 OR
42a-3-415.
    (b)  IF THE CERTIFICATION OF A CHECK OR  OTHER
ACCEPTANCE OF A DRAFT STATES  THE AMOUNT CERTIFIED
OR  ACCEPTED,  THE OBLIGATION OF THE  ACCEPTOR  IS
THAT  AMOUNT.   IF   (i)   THE   CERTIFICATION  OR
ACCEPTANCE  DOES  NOT  STATE AN AMOUNT,  (ii)  THE
AMOUNT OF THE INSTRUMENT  IS  SUBSEQUENTLY RAISED,
AND  (iii) THE INSTRUMENT IS THEN NEGOTIATED TO  A
HOLDER IN  DUE  COURSE,   THE  OBLIGATION  OF  THE
ACCEPTOR  IS THE AMOUNT OF THE INSTRUMENT  AT  THE
TIME IT WAS TAKEN BY THE HOLDER IN DUE COURSE.
    Sec.  51.   Section  42a-3-414  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1)   Unless   the    endorsement   otherwise
specifies, as by such words as "without recourse",
every endorser engages  that upon dishonor and any
necessary  notice of dishonor and protest he  will
pay the instrument  according  to its tenor at the
time  of his endorsement to the holder or  to  any
subsequent endorser who  takes  it up, even though
the endorser who takes it up was not obligated  to
do so.
    (2) Unless they  otherwise agree endorsers are
liable  to one another in the order in which  they
endorse,  which  is  presumed  to  be the order in
which their signatures appear on the instrument.]
    (a)  THIS SECTION DOES NOT APPLY TO  CASHIER'S
CHECKS OR OTHER DRAFTS DRAWN ON THE DRAWER.
    (b) IF AN UNACCEPTED  DRAFT IS DISHONORED, THE
DRAWER  IS OBLIGED TO PAY THE DRAFT (i)  ACCORDING
TO ITS TERMS AT THE TIME  IT WAS ISSUED OR, IF NOT
ISSUED,  AT THE TIME IT FIRST CAME INTO POSSESSION
OF A HOLDER,  OR  (ii)  IF  THE  DRAWER  SIGNED AN
INCOMPLETE INSTRUMENT, ACCORDING TO ITS TERMS WHEN
COMPLETED,   TO  THE  EXTENT  STATED  IN  SECTIONS
42a-3-115 AND 42a-3-407. THE OBLIGATION IS OWED TO
A PERSON ENTITLED  TO  ENFORCE  THE DRAFT OR TO AN
INDORSER   WHO   PAID  THE  DRAFT  UNDER   SECTION
42a-3-415.
    (c) IF A  DRAFT  IS  ACCEPTED  BY  A BANK, THE
DRAWER  IS  DISCHARGED, REGARDLESS OF WHEN  OR  BY
WHOM ACCEPTANCE WAS OBTAINED.
    (d) IF A DRAFT IS ACCEPTED AND THE ACCEPTOR IS
NOT  A BANK, THE OBLIGATION OF THE DRAWER  TO  PAY
THE  DRAFT  IF  THE  DRAFT  IS  DISHONORED  BY THE
ACCEPTOR  IS  THE  SAME AS THE  OBLIGATION  OF  AN
INDORSER UNDER  SUBSECTIONS (a) AND (c) OF SECTION
42a-3-415.
    (e)  IF  A  DRAFT  STATES  THAT  IT  IS  DRAWN
"WITHOUT   RECOURSE"   OR    OTHERWISE   DISCLAIMS
LIABILITY  OF  THE DRAWER TO PAY  THE  DRAFT,  THE
DRAWER IS NOT LIABLE  UNDER  SUBSECTION (b) TO PAY
THE  DRAFT  IF  THE  DRAFT  IS  NOT A  CHECK.    A
DISCLAIMER OF THE  LIABILITY  STATED IN SUBSECTION
(b) IS NOT EFFECTIVE IF THE DRAFT IS A CHECK.
    (f)  IF  (i)  A CHECK  IS  NOT  PRESENTED  FOR
PAYMENT  OR  GIVEN  TO   A   DEPOSITARY  BANK  FOR
COLLECTION WITHIN THIRTY DAYS AFTER ITS DATE, (ii)
THE DRAWEE SUSPENDS  PAYMENTS  AFTER EXPIRATION OF
THE  THIRTY-DAY  PERIOD WITHOUT PAYING THE  CHECK,
AND (iii) BECAUSE OF THE  SUSPENSION  OF PAYMENTS,
THE  DRAWER  IS DEPRIVED OF FUNDS MAINTAINED  WITH
THE DRAWEE TO  COVER  PAYMENT  OF  THE CHECK,  THE
DRAWER  TO  THE  EXTENT  DEPRIVED  OF  FUNDS   MAY
DISCHARGE  ITS   OBLIGATION  TO  PAY  THE CHECK BY
ASSIGNING  TO  THE PERSON ENTITLED TO ENFORCE  THE
CHECK THE RIGHTS OF THE DRAWER  AGAINST THE DRAWEE
WITH RESPECT TO THE FUNDS.
    Sec.   52.  Section 42a-3-415 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  An accommodation party is one who  signs
the instrument in any capacity  for the purpose of
lending his name to another party to it.
    (2)  When  the instrument has been  taken  for
value before it is due the  accommodation party is
liable in the capacity in which he has signed even
though the taker knows of the accommodation.
    (3) As  against  a  holder  in  due course and
without  notice of the accommodation oral proof of
the accommodation is  not  admissible  to give the
accommodation  party  the  benefit  of  discharges
dependent on his character as such. In other cases
the  accommodation character may be shown by  oral
proof.
    (4) An endorsement  which shows that it is not
in   the   chain  of  title  is  notice   of   its
accommodation character.
    (5) An  accommodation  party  is not liable to
the  party  accommodated,   and  if  he  pays  the
instrument  has  a   right   of  recourse  on  the
instrument against such party.]
    (a)  SUBJECT TO SUBSECTIONS (b), (c)  AND  (d)
AND TO SECTION  42a-3-419(d),  IF AN INSTRUMENT IS
DISHONORED,   AN  INDORSER IS OBLIGED TO  PAY  THE
AMOUNT DUE ON THE INSTRUMENT  (i) ACCORDING TO THE
TERMS  OF  THE  INSTRUMENT  AT  THE  TIME  IT  WAS
INDORSED, OR (ii)  IF  THE  INDORSER  INDORSED  AN
INCOMPLETE INSTRUMENT, ACCORDING TO ITS TERMS WHEN
COMPLETED,   TO  THE  EXTENT  STATED  IN  SECTIONS
42a-3-115  AND  42a-3-407.  THE OBLIGATION OF  THE
INDORSER IS OWED TO A  PERSON  ENTITLED TO ENFORCE
THE  INSTRUMENT  OR TO A SUBSEQUENT  INDORSER  WHO
PAID THE INSTRUMENT UNDER THIS SECTION.
    (b) IF AN INDORSEMENT  STATES  THAT IT IS MADE
"WITHOUT   RECOURSE"   OR   OTHERWISE    DISCLAIMS
LIABILITY OF  THE  INDORSER,   THE INDORSER IS NOT
LIABLE UNDER SUBSECTION (a) TO PAY THE INSTRUMENT.
    (c) IF NOTICE OF DISHONOR OF AN INSTRUMENT  IS
REQUIRED  BY  SECTION  42a-3-503   AND  NOTICE  OF
DISHONOR COMPLYING WITH THAT SECTION IS NOT  GIVEN
TO AN INDORSER,   THE  LIABILITY  OF  THE INDORSER
UNDER SUBSECTION (a) IS DISCHARGED.
    (d) IF A DRAFT IS ACCEPTED BY A BANK AFTER  AN
INDORSEMENT IS MADE, THE LIABILITY OF THE INDORSER
UNDER SUBSECTION (a) IS DISCHARGED.
    (e) IF AN INDORSER OF A CHECK IS LIABLE  UNDER
SUBSECTION (a) AND THE  CHECK IS NOT PRESENTED FOR
PAYMENT,   OR  GIVEN  TO  A  DEPOSITARY  BANK  FOR
COLLECTION, WITHIN  THIRTY  DAYS AFTER THE DAY THE
INDORSEMENT   WAS  MADE,   THE  LIABILITY  OF  THE
INDORSER UNDER SUBSECTION (a) IS DISCHARGED.
    Sec.  53.   Section  42a-3-416  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1) "Payment  guaranteed" or equivalent words
added  to a signature mean that the signer engages
that if the  instrument  is  not  paid when due he
will  pay it according to its tenor without resort
by the holder to any other party.
    (2)  "Collection  guaranteed"   or  equivalent
words  added to a signature mean that  the  signer
engages that if  the  instrument  is not paid when
due  he  will pay it according to its tenor,   but
only  after  the  holder  has  reduced  his  claim
against  the  maker  or acceptor to  judgment  and
execution has been returned  unsatisfied, or after
the  maker or acceptor has become insolvent or  it
is  otherwise  apparent  that  it  is  useless  to
proceed against him.
    (3)  Words of guaranty which do not  otherwise
specify guarantee payment.
    (4)  No  words  of   guaranty   added  to  the
signature  of a sole maker or acceptor affect  his
liability on the  instrument.  Such words added to
the  signature  of  one of two or more  makers  or
acceptors create a presumption  that the signature
is for the accommodation of the others.
    (5)   When   words  of   guaranty   are   used
presentment, notice  of  dishonor  and protest are
not necessary to charge the user.
    (6) Any guaranty written on the instrument  is
enforceable    notwithstanding    any   statute of
frauds.]
    (a)  A PERSON WHO TRANSFERS AN INSTRUMENT  FOR
CONSIDERATION WARRANTS TO  THE TRANSFEREE AND,  IF
THE  TRANSFER IS BY INDORSEMENT TO ANY  SUBSEQUENT
TRANSFEREE THAT:  (1)  THE  WARRANTOR  IS A PERSON
ENTITLED  TO  ENFORCE  THE  INSTRUMENT;   (2)  ALL
SIGNATURES ON  THE  INSTRUMENT  ARE  AUTHENTIC AND
AUTHORIZED;   (3)  THE  INSTRUMENT  HAS  NOT  BEEN
ALTERED; (4) THE  INSTRUMENT  IS  NOT SUBJECT TO A
DEFENSE OR CLAIM IN RECOUPMENT OF ANY PARTY  WHICH
CAN BE ASSERTED AGAINST THE WARRANTOR; AND (5) THE
WARRANTOR  HAS  NO  KNOWLEDGE  OF  ANY  INSOLVENCY
PROCEEDING COMMENCED  WITH RESPECT TO THE MAKER OR
ACCEPTOR  OR,  IN THE CASE OF AN UNACCEPTED DRAFT,
THE DRAWER.
    (b) A PERSON  TO  WHOM  THE  WARRANTIES  UNDER
SUBSECTION   (a)  ARE  MADE  AND  WHO   TOOK   THE
INSTRUMENT  IN  GOOD  FAITH  MAY  RECOVER FROM THE
WARRANTOR  AS  DAMAGES FOR BREACH OF  WARRANTY  AN
AMOUNT EQUAL TO THE LOSS  SUFFERED  AS A RESULT OF
THE  BREACH, BUT NOT MORE THAN THE AMOUNT  OF  THE
INSTRUMENT  PLUS  EXPENSES  AND  LOSS  OF INTEREST
INCURRED AS A RESULT OF THE BREACH.
    (c)  THE WARRANTIES STATED IN  SUBSECTION  (a)
CANNOT  BE  DISCLAIMED  WITH  RESPECT  TO  CHECKS.
UNLESS NOTICE OF A CLAIM FOR BREACH OF WARRANTY IS
GIVEN TO THE WARRANTOR WITH  THIRTY DAYS AFTER THE
CLAIMANT HAS REASON TO KNOW OF THE BREACH AND  THE
IDENTITY OF  THE  WARRANTOR,  THE LIABILITY OF THE
WARRANTOR  UNDER  SUBSECTION (b) IS DISCHARGED  TO
THE EXTENT OF ANY  LOSS  CAUSED  BY  THE  DELAY IN
GIVING NOTICE OF THE CLAIM.
    (d)  A CAUSE OF ACTION FOR BREACH OF  WARRANTY
UNDER THIS SECTION  ACCRUES  WHEN THE CLAIMANT HAS
REASON TO KNOW OF THE BREACH.
    Sec.   54.  Section 42a-3-417 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)   Any  person  who  obtains  payment   or
acceptance and any prior transferor  warrants to a
person who in good faith pays or accepts that  (a)
he has  a  good  title  to  the  instrument  or is
authorized  to  obtain  payment or  acceptance  on
behalf of one who has a good title; and (b) he has
no  knowledge that the signature of the  maker  or
drawer is unauthorized,  except that this warranty
is  not given by a holder in due course acting  in
good faith (i)  to  a  maker  with  respect to the
maker's  own signature;  or (ii) to a drawer  with
respect to the drawer's  own signature, whether or
not  the drawer is also the drawee; or (iii) to an
acceptor of a draft if  the  holder  in due course
took  the draft after the acceptance  or  obtained
the acceptance without knowledge that the drawer's
signature was unauthorized; and (c) the instrument
has not been materially  altered, except that this
warranty  is  not given by a holder in due  course
acting in good faith (i)  to  the maker of a note;
or  (ii)  to the drawer of a draft whether or  not
the drawer is also the  drawee;   or  (iii) to the
acceptor of a draft with respect to an  alteration
made prior to the  acceptance if the holder in due
course  took the draft after the acceptance,  even
though  the   acceptance   provided   "payable  as
originally  drawn" or equivalent terms; or (iv) to
the  acceptor  of  a  draft  with  respect  to  an
alteration made after the acceptance.
    (2) Any person who transfers an instrument and
receives consideration warrants  to his transferee
and  if  the  transfer is by  endorsement  to  any
subsequent holder who takes the instrument in good
faith  that  (a)  he  has a  good  title  to   the
instrument or is  authorized  to obtain payment or
acceptance  on behalf of one who has a good  title
and the transfer is  otherwise  rightful;  and (b)
all  signatures are genuine or authorized; and (c)
the instrument has not  been  materially  altered;
and  (d) no defense of any party is  good  against
him; and (e) he has no knowledge of any insolvency
proceeding instituted with respect to the maker or
acceptor  or   the   drawer   of   an   unaccepted
instrument.
    (3)  By  transferring "without  recourse"  the
transferor  limits   the   obligation   stated  in
subsection  (2)  (d) to a warranty that he has  no
knowledge of such a defense.
    (4) A selling  agent  or  broker  who does not
disclose  the fact that he is acting only as  such
gives the warranties provided in this section, but
if he makes such disclosure warrants only his good
faith and authority.]
    (a) IF AN UNACCEPTED DRAFT IS PRESENTED TO THE
DRAWEE  FOR PAYMENT OR ACCEPTANCE AND  THE  DRAWEE
PAYS  OR  ACCEPTS  THE   DRAFT,   (i)  THE  PERSON
OBTAINING  PAYMENT OR ACCEPTANCE, AT THE  TIME  OF
PRESENTMENT, AND (ii) A PREVIOUS TRANSFEROR OF THE
DRAFT,  AT  THE TIME OF TRANSFER,  WARRANT TO  THE
DRAWEE MAKING PAYMENT  OR  ACCEPTING  THE DRAFT IN
GOOD FAITH THAT: (1) THE WARRANTOR IS, OR WAS,  AT
THE TIME THE WARRANTOR  TRANSFERRED  THE  DRAFT, A
PERSON ENTITLED TO ENFORCE THE DRAFT OR AUTHORIZED
TO OBTAIN PAYMENT OR  ACCEPTANCE  OF  THE DRAFT ON
BEHALF OF A PERSON ENTITLED TO ENFORCE THE  DRAFT;
(2) THE DRAFT HAS  NOT  BEEN  ALTERED; AND (3) THE
WARRANTOR  HAS NO KNOWLEDGE THAT THE SIGNATURE  OF
THE DRAWER OF THE DRAFT IS UNAUTHORIZED.
    (b) A DRAWEE MAKING  PAYMENT  MAY RECOVER FROM
ANY WARRANTOR DAMAGES FOR BREACH OF WARRANTY EQUAL
TO THE AMOUNT PAID BY  THE  DRAWEE LESS THE AMOUNT
THE DRAWEE RECEIVED OR IS ENTITLED TO RECEIVE FROM
THE DRAWER BECAUSE OF  THE  PAYMENT.  IN ADDITION,
THE   DRAWEE  IS  ENTITLED  TO  COMPENSATION   FOR
EXPENSES AND LOSS OF  INTEREST  RESULTING FROM THE
BREACH. THE RIGHT OF THE DRAWEE TO RECOVER DAMAGES
UNDER  THIS  SUBSECTION  IS  NOT  AFFECTED  BY ANY
FAILURE OF THE DRAWEE TO EXERCISE ORDINARY CARE IN
MAKING PAYMENT.  IF THE  DRAWEE ACCEPTS THE DRAFT,
BREACH  OF WARRANTY IS A DEFENSE TO THE OBLIGATION
OF THE ACCEPTOR.  IF  THE  ACCEPTOR  MAKES PAYMENT
WITH  RESPECT  TO  THE  DRAFT,   THE  ACCEPTOR  IS
ENTITLED TO RECOVER FROM  ANY WARRANTOR FOR BREACH
OF WARRANTY THE AMOUNTS STATED IN THIS SUBSECTION.
    (c) IF A DRAWEE ASSERTS A CLAIM FOR BREACH  OF
WARRANTY   UNDER   SUBSECTION   (a)   BASED  ON AN
UNAUTHORIZED  INDORSEMENT  OF  THE  DRAFT  OR   AN
ALTERATION OF THE DRAFT,  THE WARRANTOR MAY DEFEND
BY PROVING THAT THE INDORSEMENT IS EFFECTIVE UNDER
SECTION 42a-3-404  OR  42a-3-405  OR THE DRAWER IS
PRECLUDED  UNDER  SECTION 42a-3-406  OR  42a-4-406
FROM ASSERTING AGAINST THE DRAWEE THE UNAUTHORIZED
INDORSEMENT OR ALTERATION.
    (d) IF (i) A DISHONORED DRAFT IS PRESENTED FOR
PAYMENT TO THE DRAWER OR  AN  INDORSER OR (ii) ANY
OTHER  INSTRUMENT  IS PRESENTED FOR PAYMENT  TO  A
PARTY OBLIGED TO  PAY  THE  INSTRUMENT,  AND (iii)
PAYMENT IS RECEIVED, THE FOLLOWING RULES APPLY:
    (1)  THE PERSON OBTAINING PAYMENT AND A  PRIOR
TRANSFEROR OF THE INSTRUMENT WARRANT TO THE PERSON
MAKING  PAYMENT IN GOOD FAITH THAT  THE  WARRANTOR
IS, OR WAS, AT THE TIME  THE WARRANTOR TRANSFERRED
THE  INSTRUMENT,  A PERSON ENTITLED TO ENFORCE THE
INSTRUMENT  OR  AUTHORIZED  TO  OBTAIN  PAYMENT ON
BEHALF   OF  A  PERSON  ENTITLED  TO  ENFORCE  THE
INSTRUMENT.
    (2) THE PERSON MAKING PAYMENT MAY RECOVER FROM
ANY  WARRANTOR  FOR BREACH OF WARRANTY  AN  AMOUNT
EQUAL TO THE AMOUNT PAID PLUS EXPENSES AND LOSS OF
INTEREST RESULTING FROM THE BREACH.
    (e)  THE WARRANTIES STATED IN SUBSECTIONS  (a)
AND (d)  CANNOT  BE  DISCLAIMED  WITH  RESPECT  TO
CHECKS.   UNLESS  NOTICE OF A CLAIM FOR BREACH  OF
WARRANTY IS GIVEN TO THE  WARRANTOR  WITHIN THIRTY
DAYS  AFTER THE CLAIMANT HAS REASON TO KNOW OF THE
BREACH AND THE  IDENTITY  OF  THE  WARRANTOR,  THE
LIABILITY OF THE WARRANTOR UNDER SUBSECTION (b) OR
(d) IS DISCHARGED TO THE EXTENT OF ANY LOSS CAUSED
BY THE DELAY IN GIVING NOTICE OF THE CLAIM.
    (f)  A CAUSE OF ACTION FOR BREACH OF  WARRANTY
UNDER THIS SECTION  ACCRUES  WHEN THE CLAIMANT HAS
REASON TO KNOW OF THE BREACH.
    Sec.   55.  Section 42a-3-418 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [Except  for  recovery  of  bank  payments  as
provided in article 4 and except for liability for
breach  of  warranty  on  presentment  under   the
preceding  section,  payment  or acceptance of any
instrument  is  final in favor of a holder in  due
course, or a person who has  in good faith changed
his position in reliance on the payment.]
    (a)  EXCEPT AS PROVIDED IN SUBSECTION (c),  IF
THE DRAWEE OF A DRAFT  PAYS  OR  ACCEPTS THE DRAFT
AND  THE DRAWEE ACTED ON THE MISTAKEN BELIEF  THAT
(i) PAYMENT OF  THE  DRAFT  HAD  NOT  BEEN STOPPED
PURSUANT   TO  SECTION  42a-4-403  OR   (ii)   THE
SIGNATURE  OF   THE   DRAWER   OF  THE  DRAFT  WAS
AUTHORIZED,   THE DRAWEE MAY RECOVER THE AMOUNT OF
THE DRAFT FROM  THE  PERSON  TO  WHOM OR FOR WHOSE
BENEFIT  PAYMENT  WAS  MADE OR,  IN  THE  CASE  OF
ACCEPTANCE, MAY REVOKE  THE ACCEPTANCE.  RIGHTS OF
THE  DRAWEE UNDER THIS SUBSECTION ARE NOT AFFECTED
BY FAILURE OF THE DRAWEE TO EXERCISE ORDINARY CARE
IN PAYING OR ACCEPTING THE DRAFT.
    (b)  EXCEPT AS PROVIDED IN SUBSECTION (c),  IF
AN INSTRUMENT HAS BEEN PAID OR ACCEPTED BY MISTAKE
AND THE CASE IS NOT COVERED BY SUBSECTION (a), THE
PERSON PAYING  OR  ACCEPTING  MAY,   TO THE EXTENT
PERMITTED   BY  THE  LAW  GOVERNING  MISTAKE   AND
RESTITUTION,  (i)  RECOVER  THE  PAYMENT  FROM THE
PERSON  TO WHOM OR FOR WHOSE BENEFIT  PAYMENT  WAS
MADE OR (ii) IN THE CASE OF ACCEPTANCE, MAY REVOKE
THE ACCEPTANCE.
    (c) THE REMEDIES PROVIDED BY SUBSECTION (a) OR
(b) MAY NOT BE ASSERTED AGAINST  A PERSON WHO TOOK
THE INSTRUMENT IN GOOD FAITH AND FOR VALUE OR  WHO
IN GOOD FAITH CHANGED  POSITION IN RELIANCE ON THE
PAYMENT  OR ACCEPTANCE.  THIS SUBSECTION DOES  NOT
LIMIT REMEDIES PROVIDED  BY  SECTION  42a-3-417 OR
42a-4-407.
    (d) NOTWITHSTANDING SECTION 93 OF THIS ACT, IF
AN INSTRUMENT IS PAID OR  ACCEPTED  BY MISTAKE AND
THE  PAYOR OR ACCEPTOR RECOVERS PAYMENT OR REVOKES
ACCEPTANCE  UNDER   SUBSECTION  (a)  OR  (b),  THE
INSTRUMENT  IS  DEEMED  NOT TO HAVE BEEN  PAID  OR
ACCEPTED AND IS TREATED  AS  DISHONORED,   AND THE
PERSON  FROM WHOM PAYMENT IS RECOVERED HAS  RIGHTS
AS A PERSON ENTITLED  TO  ENFORCE  THE  DISHONORED
INSTRUMENT.
    Sec.   56.  Section 42a-3-419 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  An  instrument is converted when  (a)  a
drawee to whom  it  is  delivered  for  acceptance
refuses  to return it on demand; or (b) any person
to whom it is  delivered  for  payment  refuses on
demand either to pay or to return it; or (c) it is
paid on a forged endorsement.
    (2)  In  an  action  against  a  drawee  under
subsection   (1)  the  measure  of  the   drawee's
liability is the face amount of the instrument. In
any  other action under subsection (1) the measure
of liability is presumed to  be the face amount of
the instrument.
    (3)  Subject to the provisions of  this  title
concerning      restrictive     endorsements     a
representative,    including   a   depositary   or
collecting  bank,  who  has  in  good faith and in
accordance    with   the   reasonable   commercial
standards  applicable  to  the  business  of  such
representative  dealt  with an instrument  or  its
proceeds on behalf  of  one  who  was not the true
owner  is not liable in conversion or otherwise to
the true owner beyond  the  amount of any proceeds
remaining in his hands.
    (4)  An intermediary bank or payor bank  which
is  not  a  depositary   bank  is  not  liable  in
conversion  solely  by  reason of  the  fact  that
proceeds of  an  item  endorsed  restrictively  as
provided  in sections 42a-3-205 and 42a-3-206  are
not  paid  or   applied   consistently   with  the
restrictive  endorsement of an endorser other than
its immediate transferor.]
    (a) IF AN INSTRUMENT IS ISSUED FOR VALUE GIVEN
FOR  THE  BENEFIT  OF A PARTY  TO  THE  INSTRUMENT
("ACCOMMODATED PARTY")  AND  ANOTHER  PARTY TO THE
INSTRUMENT   ("ACCOMMODATION  PARTY")  SIGNS   THE
INSTRUMENT FOR THE PURPOSE  OF INCURRING LIABILITY
ON   THE   INSTRUMENT   WITHOUT   BEING A   DIRECT
BENEFICIARY OF THE VALUE GIVEN FOR THE INSTRUMENT,
THE  INSTRUMENT  IS SIGNED  BY  THE  ACCOMMODATION
PARTY "FOR ACCOMMODATION".
    (b)  AN   ACCOMMODATION   PARTY  MAY  SIGN THE
INSTRUMENT AS MAKER, DRAWER, ACCEPTOR, OR INDORSER
AND,  SUBJECT TO SUBSECTION (d), IS OBLIGED TO PAY
THE  INSTRUMENT  IN  THE  CAPACITY  IN  WHICH  THE
ACCOMMODATION PARTY  SIGNS.   THE OBLIGATION OF AN
ACCOMMODATION     PARTY    MAY     BE     ENFORCED
NOTWITHSTANDING ANY  STATUTE OF FRAUDS AND WHETHER
OR    NOT   THE   ACCOMMODATION   PARTY   RECEIVES
CONSIDERATION FOR THE ACCOMMODATION.
    (c) A PERSON SIGNING AN INSTRUMENT IS PRESUMED
TO  BE AN ACCOMMODATION PARTY AND THERE IS  NOTICE
THAT THE INSTRUMENT IS SIGNED FOR ACCOMMODATION IF
THE  SIGNATURE IS AN ANOMALOUS INDORSEMENT  OR  IS
ACCOMPANIED BY WORDS INDICATING THAT THE SIGNER IS
ACTING  AS SURETY OR GUARANTOR WITH RESPECT TO THE
OBLIGATION OF  ANOTHER  PARTY  TO  THE INSTRUMENT.
EXCEPT  AS  PROVIDED  IN SECTION  42a-3-605,   THE
OBLIGATION OF AN  ACCOMMODATION  PARTY  TO PAY THE
INSTRUMENT  IS NOT AFFECTED BY THE FACT  THAT  THE
PERSON ENFORCING  THE  OBLIGATION  HAD NOTICE WHEN
THE  INSTRUMENT WAS TAKEN BY THAT PERSON THAT  THE
ACCOMMODATION  PARTY  SIGNED  THE  INSTRUMENT  FOR
ACCOMMODATION.
    (d)   IF  THE  SIGNATURE  OF A  PARTY  TO   AN
INSTRUMENT  IS  ACCOMPANIED  BY  WORDS  INDICATING
UNAMBIGUOUSLY   THAT  THE  PARTY  IS  GUARANTEEING
COLLECTION RATHER THAN  PAYMENT  OF THE OBLIGATION
OF  ANOTHER PARTY TO THE INSTRUMENT, THE SIGNER IS
OBLIGED TO PAY THE AMOUNT DUE ON THE INSTRUMENT TO
A  PERSON ENTITLED TO ENFORCE THE INSTRUMENT  ONLY
IF (i) EXECUTION  OF  JUDGMENT  AGAINST  THE OTHER
PARTY  HAS  BEEN RETURNED UNSATISFIED,   (ii)  THE
OTHER  PARTY  IS  INSOLVENT  OR  IN  AN INSOLVENCY
PROCEEDING, (iii) THE OTHER PARTY CANNOT BE SERVED
WITH PROCESS, OR  (iv)  IT  IS  OTHERWISE APPARENT
THAT  PAYMENT  CANNOT BE OBTAINED FROM  THE  OTHER
PARTY.
    (e)  AN   ACCOMMODATION   PARTY  WHO  PAYS THE
INSTRUMENT  IS ENTITLED TO REIMBURSEMENT FROM  THE
ACCOMMODATED PARTY AND IS  ENTITLED TO ENFORCE THE
INSTRUMENT  AGAINST  THE ACCOMMODATED  PARTY.   AN
ACCOMMODATED PARTY WHO PAYS  THE INSTRUMENT HAS NO
RIGHT OF RECOURSE AGAINST, AND IS NOT ENTITLED  TO
CONTRIBUTION FROM, AN ACCOMMODATION PARTY.
    Sec.  57.  (NEW)  (a)  The  law  applicable to
conversion   of   personal  property  applies   to
instruments. An instrument is also converted if it
is  taken by transfer, other  than a  negotiation,
from  a  person  not   entitled   to  enforce  the
instrument or a bank makes or obtains payment with
respect  to  the  instrument   for  a  person  not
entitled  to  enforce the  instrument  or  receive
payment. An action for conversion of an instrument
may  not be brought by (i) the issuer or  acceptor
of the instrument or  (ii) a payee or indorsee who
did  not receive delivery of the instrument either
directly or  through  delivery  to  an  agent or a
co-payee.
    (b)  In  an action under subsection  (a),  the
measure of liability is presumed  to be the amount
payable  on the instrument, but recovery  may  not
exceed the amount of the  plaintiff's  interest in
the instrument.
    (c) A representative, other than a  depositary
bank,   who  has  in  good  faith  dealt  with  an
instrument  or its proceeds on behalf of  one  who
was  not  the  person   entitled  to  enforce  the
instrument  is  not liable in conversion  to  that
person beyond the amount  of  any proceeds that it
has not paid out.
    Sec.   58.  Section 42a-3-501 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  Unless  excused as provided  in  section
42a-3-511  presentment  is   necessary  to  charge
secondary parties as follows: (a) Presentment  for
acceptance is necessary  to  charge the drawer and
endorsers of a draft where the draft so  provides,
or is payable elsewhere  than  at the residence or
place  of business of the drawee, or its  date  of
payment depends upon such presentment.  The holder
may at his option present for acceptance any other
draft payable at a  stated  date;  (b) presentment
for  payment is necessary to charge any  endorser;
(c) in the case of any  drawer,  the acceptor of a
draft  payable  at a bank or the maker  of a  note
payable at a  bank,   presentment  for  payment is
necessary,    but  failure  to  make   presentment
discharges such drawer, acceptor  or maker only as
stated in section 42a-3-502 (1) (b).
    (2)  Unless  excused as  provided  in  section
42a-3-511 (a) notice of  any dishonor is necessary
to  charge  any endorser;  (b) in the case of  any
drawer, the acceptor of a  draft payable at a bank
or  the maker of a note payable at a bank,  notice
of any dishonor is necessary,  but failure to give
such  notice discharges such drawer,  acceptor  or
maker only as stated in section 42a-3-502(1) (b).
    (3)  Unless  excused  as  provided  in section
42a-3-511  protest of any dishonor is necessary to
charge the drawer and endorsers of any draft which
on its face appears to be drawn or payable outside
of the states and territories of the United States
and  the District of Columbia.  The holder may  at
his option make  protest  of  any  dishonor of any
other  instrument  and in the  case  of a  foreign
draft may on  insolvency  of  the  acceptor before
maturity make protest for better security.
    (4)  Notwithstanding  any  provision  of  this
section,   neither   presentment   nor  notice  of
dishonor  nor  protest is necessary to  charge  an
endorser who  has  endorsed  an  instrument  after
maturity.]
    (a) "PRESENTMENT" MEANS A DEMAND MADE BY OR ON
BEHALF  OF  A  PERSON   ENTITLED   TO  ENFORCE  AN
INSTRUMENT  (i) TO PAY THE INSTRUMENT MADE TO  THE
DRAWEE OR A PARTY  OBLIGED  TO  PAY THE INSTRUMENT
OR,   IN  THE  CASE OF A NOTE  OR  ACCEPTED  DRAFT
PAYABLE AT A BANK, TO THE  BANK, OR (ii) TO ACCEPT
A DRAFT MADE TO THE DRAWEE.
    (b) THE FOLLOWING RULES ARE SUBJECT TO ARTICLE
4,  AGREEMENT OF THE PARTIES,   AND CLEARING-HOUSE
RULES AND THE LIKE:
    (1)  PRESENTMENT MAY BE MADE AT THE  PLACE  OF
PAYMENT OF THE  INSTRUMENT AND MUST BE MADE AT THE
PLACE OF PAYMENT IF THE INSTRUMENT IS PAYABLE AT A
BANK IN THE  UNITED  STATES;   MAY  BE MADE BY ANY
COMMERCIALLY REASONABLE MEANS, INCLUDING AN  ORAL,
WRITTEN, OR ELECTRONIC COMMUNICATION; IS EFFECTIVE
WHEN  THE  DEMAND  FOR PAYMENT  OR  ACCEPTANCE  IS
RECEIVED BY  THE  PERSON  TO  WHOM  PRESENTMENT IS
MADE;   AND IS EFFECTIVE IF MADE TO ANY ONE OF TWO
OR MORE MAKERS,   ACCEPTORS,   DRAWEES,   OR OTHER
PAYORS.
    (2)   UPON  DEMAND  OF  THE  PERSON  TO   WHOM
PRESENTMENT IS MADE, THE PERSON MAKING PRESENTMENT
MUST   (i)  EXHIBIT  THE  INSTRUMENT,   (ii)  GIVE
REASONABLE  IDENTIFICATION  AND, IF PRESENTMENT IS
MADE  ON  BEHALF  OF ANOTHER  PERSON,   REASONABLE
EVIDENCE OF AUTHORITY TO  DO  SO, AND (iii) SIGN A
RECEIPT  ON THE INSTRUMENT FOR ANY PAYMENT MADE OR
SURRENDER THE INSTRUMENT IF FULL PAYMENT IS MADE.
    (3)  WITHOUT  DISHONORING  THE INSTRUMENT, THE
PARTY  TO WHOM PRESENTMENT IS MADE MAY (i)  RETURN
THE   INSTRUMENT   FOR   LACK   OF   A   NECESSARY
INDORSEMENT,  OR (ii) REFUSE PAYMENT OR ACCEPTANCE
FOR FAILURE OF THE PRESENTMENT  TO COMPLY WITH THE
TERMS  OF  THE INSTRUMENT,  AN  AGREEMENT  OF  THE
PARTIES, OR OTHER APPLICABLE LAW OR RULE.
    (4) THE PARTY TO WHOM  PRESENTMENT IS MADE MAY
TREAT   PRESENTMENT  AS  OCCURRING  ON  THE   NEXT
BUSINESS DAY AFTER THE  DAY  OF PRESENTMENT IF THE
PARTY TO WHOM PRESENTMENT IS MADE HAS  ESTABLISHED
A CUT-OFF HOUR NOT  EARLIER  THAN TWO O'CLOCK P.M.
FOR  THE  RECEIPT AND  PROCESSING  OF  INSTRUMENTS
PRESENTED   FOR    PAYMENT   OR   ACCEPTANCE   AND
PRESENTMENT IS MADE AFTER THE CUT-OFF HOUR.
    Sec.   59.  Section 42a-3-502 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)   Where  without  excuse  any   necessary
presentment  or  notice  of  dishonor  is  delayed
beyond the time when it is due (a) any endorser is
discharged; and (b) any drawer  or the acceptor of
a  draft payable at a bank or the maker of a  note
payable at a bank who because  the drawee or payor
bank   becomes  insolvent  during  the  delay   is
deprived of funds  maintained  with  the drawee or
payor  bank to cover the instrument may  discharge
his liability by written assignment  to the holder
of his rights against the drawee or payor bank  in
respect of such funds,  but such drawer,  acceptor
or maker is not otherwise discharged.
    (2)  Where without excuse a necessary  protest
is delayed beyond  the  time  when  it  is due any
drawer or endorser is discharged.]
    (a)  DISHONOR  OF A NOTE IS  GOVERNED  BY  THE
FOLLOWING RULES:
    (1) IF THE NOTE IS PAYABLE ON DEMAND, THE NOTE
IS  DISHONORED IF PRESENTMENT IS DULY MADE TO  THE
MAKER AND THE  NOTE  IS  NOT  PAID  ON  THE DAY OF
PRESENTMENT.
    (2)  IF THE NOTE IS NOT PAYABLE ON DEMAND  AND
IS PAYABLE AT OR  THROUGH  A  BANK OR THE TERMS OF
THE   NOTE  REQUIRE  PRESENTMENT,   THE  NOTE   IS
DISHONORED  IF  PRESENTMENT  IS  DULY MADE AND THE
NOTE  IS NOT PAID ON THE DAY IT BECOMES PAYABLE OR
THE DAY OF PRESENTMENT, WHICHEVER IS LATER.
    (3) IF THE NOTE IS NOT  PAYABLE  ON DEMAND AND
PARAGRAPH   (2)  DOES  NOT  APPLY,   THE  NOTE  IS
DISHONORED IF IT IS NOT PAID ON THE DAY IT BECOMES
PAYABLE.
    (b) DISHONOR OF AN UNACCEPTED DRAFT OTHER THAN
A DOCUMENTARY DRAFT IS  GOVERNED  BY THE FOLLOWING
RULES:
    (1)  IF A CHECK IS DULY PRESENTED FOR  PAYMENT
TO THE PAYOR  BANK  OTHERWISE  THAN  FOR IMMEDIATE
PAYMENT  OVER THE COUNTER, THE CHECK IS DISHONORED
IF THE PAYOR BANK MAKES TIMELY RETURN OF THE CHECK
OR  SENDS TIMELY NOTICE OF DISHONOR OR  NONPAYMENT
UNDER SECTION 42a-4-301 OR  42a-4-302,  OR BECOMES
ACCOUNTABLE  FOR  THE AMOUNT OF  THE  CHECK  UNDER
SECTION 42a-4-302.
    (2) IF  A  DRAFT  IS  PAYABLE  ON  DEMAND  AND
PARAGRAPH  (1)  DOES  NOT  APPLY,   THE  DRAFT  IS
DISHONORED IF PRESENTMENT FOR PAYMENT IS DULY MADE
TO THE DRAWEE AND THE DRAFT IS NOT PAID ON THE DAY
OF PRESENTMENT.
    (3) IF A DRAFT IS  PAYABLE ON A DATE STATED IN
THE  DRAFT,   THE  DRAFT  IS  DISHONORED  IF   (i)
PRESENTMENT FOR PAYMENT IS DULY MADE TO THE DRAWEE
AND  PAYMENT  IS  NOT MADE ON THE  DAY  THE  DRAFT
BECOMES  PAYABLE  OR   THE   DAY  OF  PRESENTMENT,
WHICHEVER  IS  LATER,   OR  (ii)  PRESENTMENT  FOR
ACCEPTANCE IS DULY MADE  BEFORE  THE DAY THE DRAFT
BECOMES  PAYABLE AND THE DRAFT IS NOT ACCEPTED  ON
THE DAY OF PRESENTMENT.
    (4) IF A  DRAFT  IS  PAYABLE  ON  ELAPSE  OF A
PERIOD  OF  TIME AFTER SIGHT OR  ACCEPTANCE,   THE
DRAFT IS DISHONORED IF PRESENTMENT  FOR ACCEPTANCE
IS DULY MADE AND THE DRAFT IS NOT ACCEPTED ON  THE
DAY OF PRESENTMENT.
    (c)  DISHONOR  OF  AN  UNACCEPTED  DOCUMENTARY
DRAFT  OCCURS  ACCORDING  TO THE RULES  STATED  IN
SUBSECTION  (b)(2),   (3)  AND  (4),   EXCEPT THAT
PAYMENT  OR  ACCEPTANCE  MAY  BE  DELAYED  WITHOUT
DISHONOR UNTIL  NO  LATER  THAN  THE  CLOSE OF THE
THIRD BUSINESS DAY OF THE DRAWEE FOLLOWING THE DAY
ON WHICH PAYMENT  OR  ACCEPTANCE  IS  REQUIRED  BY
THOSE PARAGRAPHS.
    (d) DISHONOR OF AN ACCEPTED DRAFT IS  GOVERNED
BY THE FOLLOWING RULES:
    (1) IF THE DRAFT  IS  PAYABLE  ON  DEMAND, THE
DRAFT IS DISHONORED IF PRESENTMENT FOR PAYMENT  IS
DULY MADE TO  THE  ACCEPTOR  AND  THE DRAFT IS NOT
PAID ON THE DAY OF PRESENTMENT.
    (2) IF THE DRAFT IS NOT PAYABLE ON DEMAND, THE
DRAFT IS DISHONORED IF PRESENTMENT  FOR PAYMENT IS
DULY MADE TO THE ACCEPTOR AND PAYMENT IS NOT  MADE
ON THE  DAY  IT  BECOMES  PAYABLE  OR  THE  DAY OF
PRESENTMENT, WHICHEVER IS LATER.
    (e)  IN  ANY  CASE  IN  WHICH  PRESENTMENT  IS
OTHERWISE REQUIRED FOR DISHONOR UNDER THIS SECTION
AND   PRESENTMENT   IS   EXCUSED   UNDER   SECTION
42a-3-504, DISHONOR  OCCURS WITHOUT PRESENTMENT IF
THE INSTRUMENT IS NOT DULY ACCEPTED OR PAID.
    (f)  IF A DRAFT IS DISHONORED  BECAUSE  TIMELY
ACCEPTANCE  OF  THE  DRAFT  WAS  NOT  MADE AND THE
PERSON ENTITLED TO DEMAND ACCEPTANCE CONSENTS TO A
LATE ACCEPTANCE, FROM  THE  TIME OF ACCEPTANCE THE
DRAFT IS TREATED AS NEVER HAVING BEEN DISHONORED.
    Sec.   60.  Section 42a-3-503 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  Unless a different time is expressed  in
the instrument the  time  for  any  presentment is
determined  as follows: (a) Where an instrument is
payable at or a fixed  period  after a stated date
any  presentment for acceptance must be made on or
before the date  it  is  payable;   (b)  where  an
instrument  is payable after sight it must  either
be presented for acceptance or negotiated within a
reasonable  time after date or issue whichever  is
later; (c) where an  instrument  shows the date on
which it is payable presentment for payment is due
on  that  date;   (d)   where   an  instrument  is
accelerated presentment for payment is due  within
a reasonable time after the acceleration; (e) with
respect  to  the liability of any secondary  party
presentment for acceptance or payment of any other
instrument  is due within a reasonable time  after
such party becomes liable thereon.
    (2)  A  reasonable  time  for  presentment  is
determined  by the nature of the instrument,   any
usage of banking  or  trade  and  the facts of the
particular  case.  In the case of  an  uncertified
check which is drawn and payable within the United
States  and  which is not a draft drawn by a  bank
the  following  are   presumed  to  be  reasonable
periods  within which to present for payment or to
initiate bank collection:  (a) With respect to the
liability of the drawer, thirty days after date or
issue whichever is later;  and (b) with respect to
the liability of an endorser, seven days after his
endorsement.
    (3)  Where  any  presentment  is  due on a day
which  is  not a full business day for either  the
person making  presentment  or the party to pay or
accept,  presentment is due on the next  following
day which is a full business day for both parties.
    (4) Presentment to be  sufficient must be made
at  a reasonable hour, and if at a bank during its
banking day.]
    (a) THE OBLIGATION  OF  AN  INDORSER STATED IN
SECTION  42a-3-415(a)  AND  THE  OBLIGATION  OF  A
DRAWER STATED IN SECTION  42a-3-414(d)  MAY NOT BE
ENFORCED  UNLESS  (i) THE INDORSER  OR  DRAWER  IS
GIVEN  NOTICE  OF   DISHONOR   OF  THE  INSTRUMENT
COMPLYING  WITH  THIS  SECTION OR (ii)  NOTICE  OF
DISHONOR IS EXCUSED UNDER SECTION 42a-3-504(b).
    (b) NOTICE  OF  DISHONOR  MAY  BE GIVEN BY ANY
PERSON;    MAY  BE  GIVEN  BY   ANY   COMMERCIALLY
REASONABLE MEANS,   INCLUDING AN ORAL, WRITTEN, OR
ELECTRONIC  COMMUNICATION; AND IS SUFFICIENT IF IT
REASONABLY IDENTIFIES THE INSTRUMENT AND INDICATES
THAT THE INSTRUMENT HAS BEEN DISHONORED OR HAS NOT
BEEN PAID OR ACCEPTED.   RETURN  OF  AN INSTRUMENT
GIVEN  TO  A  BANK FOR  COLLECTION  IS  SUFFICIENT
NOTICE OF DISHONOR.
    (c) SUBJECT  TO  SECTION  42a-3-504(c),   WITH
RESPECT TO AN INSTRUMENT TAKEN FOR COLLECTION BY A
COLLECTING BANK, NOTICE OF  DISHONOR MUST BE GIVEN
(i)  BY  THE  BANK BEFORE  MIDNIGHT  OF  THE  NEXT
BANKING DAY FOLLOWING THE BANKING DAY ON WHICH THE
BANK   RECEIVES   NOTICE   OF  DISHONOR   OF   THE
INSTRUMENT,  OR (ii) BY  ANY  OTHER  PERSON WITHIN
THIRTY DAYS FOLLOWING THE DAY ON WHICH THE  PERSON
RECEIVES NOTICE OF DISHONOR.   WITH RESPECT TO ANY
OTHER INSTRUMENT, NOTICE OF DISHONOR MUST BE GIVEN
WITHIN THIRTY  DAYS  FOLLOWING  THE  DAY  ON WHICH
DISHONOR OCCURS.
    Sec.   61.  Section 42a-3-504 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1) Presentment is a demand for acceptance or
payment made upon the maker,  acceptor,  drawee or
other payor by or on behalf of the holder.
    (2)  Presentment may be made (a) by  mail,  in
which event the time of  presentment is determined
by the time of receipt of the mail; or (b) through
a  clearing   house;    or   (c)  at  the place of
acceptance  or payment specified in the instrument
or if there be none at  the  place  of business or
residence  of  the  party to accept  or  pay.   If
neither the  party  to  accept  or  pay nor anyone
authorized to act for him is present or accessible
at such place presentment is excused.
    (3) It may be  made  (a)  to any one of two or
more  makers, acceptors, drawees or other  payors;
or (b) to any person who  has authority to make or
refuse the acceptance or payment.
    (4) A draft accepted or a note made payable at
a bank in the United  States  must be presented at
such bank.
    (5)   In  the  cases  described   in   section
42a-4-210  presentment  may  be made in the manner
and with the result stated in that section.]
    (a)  PRESENTMENT FOR PAYMENT OR ACCEPTANCE  OF
AN  INSTRUMENT  IS  EXCUSED   IF  (i)  THE  PERSON
ENTITLED  TO  PRESENT THE INSTRUMENT  CANNOT  WITH
REASONABLE DILIGENCE  MAKE  PRESENTMENT,  (ii) THE
MAKER  OR ACCEPTOR HAS REPUDIATED AN OBLIGATION TO
PAY THE INSTRUMENT  OR  IS  DEAD  OR IN INSOLVENCY
PROCEEDINGS,  (iii) BY THE TERMS OF THE INSTRUMENT
PRESENTMENT  IS  NOT  NECESSARY   TO  ENFORCE  THE
OBLIGATION  OF INDORSERS OR THE DRAWER,  (iv)  THE
DRAWER  OR  INDORSER  WHOSE  OBLIGATION  IS  BEING
ENFORCED  HAS WAIVED PRESENTMENT OR OTHERWISE  HAS
NO REASON TO EXPECT OR  RIGHT  TO REQUIRE THAT THE
INSTRUMENT  BE PAID OR ACCEPTED, OR (v) THE DRAWER
INSTRUCTED THE  DRAWEE  NOT  TO  PAY OR ACCEPT THE
DRAFT  OR  THE  DRAWEE WAS NOT  OBLIGATED  TO  THE
DRAWER TO PAY THE DRAFT.
    (b) NOTICE  OF  DISHONOR  IS EXCUSED IF (i) BY
THE  TERMS OF THE INSTRUMENT NOTICE OF DISHONOR IS
NOT NECESSARY TO ENFORCE THE OBLIGATION OF A PARTY
TO  PAY  THE INSTRUMENT, OR (ii) THE  PARTY  WHOSE
OBLIGATION IS  BEING  ENFORCED  WAIVED  NOTICE  OF
DISHONOR. A WAIVER OF PRESENTMENT IS ALSO A WAIVER
OF NOTICE OF DISHONOR.
    (c) DELAY  IN  GIVING  NOTICE  OF  DISHONOR IS
EXCUSED  IF THE DELAY WAS CAUSED BY  CIRCUMSTANCES
BEYOND THE CONTROL OF THE PERSON GIVING THE NOTICE
AND   THE  PERSON  GIVING  THE  NOTICE   EXERCISED
REASONABLE DILIGENCE  AFTER THE CAUSE OF THE DELAY
CEASED TO OPERATE.
    Sec.   62.  Section 42a-3-505 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1) The party to whom presentment is made may
without  dishonor  require  (a)  exhibition of the
instrument;   and (b) reasonable identification of
the person making presentment  and evidence of his
authority to make it if made for another; and  (c)
that the instrument be  produced for acceptance or
payment at a place specified in it, or if there be
none at any place reasonable in the circumstances;
and (d) a signed receipt on the instrument for any
partial or full  payment  and  its  surrender upon
full payment.
    (2)   Failure   to  comply   with   any   such
requirement  invalidates  the  presentment but the
person  presenting has a reasonable time in  which
to comply and the time  for  acceptance or payment
runs from the time of compliance.]
    (a)  THE FOLLOWING ARE ADMISSIBLE AS  EVIDENCE
AND CREATE A  PRESUMPTION  OF  DISHONOR AND OF ANY
NOTICE OF DISHONOR STATED: (1) A DOCUMENT  REGULAR
IN  FORM  AS  PROVIDED  IN  SUBSECTION  (b)  WHICH
PURPORTS TO BE A PROTEST; (2) A PURPORTED STAMP OR
WRITING OF THE DRAWEE,  PAYOR BANK,  OR PRESENTING
BANK  ON  OR ACCOMPANYING THE  INSTRUMENT  STATING
THAT ACCEPTANCE OR PAYMENT HAS BEEN REFUSED UNLESS
REASONS FOR THE REFUSAL ARE STATED AND THE REASONS
ARE NOT CONSISTENT  WITH  DISHONOR;  (3) A BOOK OR
RECORD  OF  THE DRAWEE, PAYOR BANK, OR  COLLECTING
BANK, KEPT IN THE USUAL  COURSE  OF BUSINESS WHICH
SHOWS  DISHONOR,  EVEN IF THERE IS NO EVIDENCE  OF
WHO MADE THE ENTRY.
    (b) A PROTEST IS  A  CERTIFICATE  OF  DISHONOR
MADE BY A UNITED STATES CONSUL OR VICE CONSUL,  OR
A NOTARY PUBLIC  OR  OTHER  PERSON  AUTHORIZED  TO
ADMINISTER  OATHS  BY THE LAW OF THE  PLACE  WHERE
DISHONOR OCCURS.  IT MAY BE  MADE UPON INFORMATION
SATISFACTORY  TO  THAT PERSON.  THE  PROTEST  MUST
IDENTIFY THE INSTRUMENT  AND  CERTIFY  EITHER THAT
PRESENTMENT  HAS BEEN MADE OR,  IF NOT MADE,   THE
REASON  WHY  IT  WAS   NOT  MADE,   AND  THAT  THE
INSTRUMENT HAS BEEN DISHONORED BY NONACCEPTANCE OR
NONPAYMENT.   THE  PROTEST  MAY  ALSO CERTIFY THAT
NOTICE  OF DISHONOR HAS BEEN GIVEN TO SOME OR  ALL
PARTIES.
    Sec.  63.   Section  42a-3-601  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1) The extent of the  discharge of any party
from liability on an instrument is governed by the
sections  on  (a)   payment   or  satisfaction  as
provided  in  section 42a-3-603; or (b) tender  of
payment as provided in  section  42a-3-604; or (c)
cancellation   or  renunciation  as  provided   in
section 42a-3-605;  or (d)  impairment of right of
recourse  or of collateral as provided in  section
42a-3-606;  or (e) reacquisition of the instrument
by a prior party as provided in section 42a-3-208;
or  (f)  fraudulent  and  material  alteration  as
provided    in   section   42a-3-407;    or    (g)
certification of  a  check  as provided in section
42a-3-411;  or  (h) acceptance varying a draft  as
provided in section  42a-3-412;  or  (i) unexcused
delay  in  presentment or notice  of  dishonor  or
protest as provided in section 42a-3-502.
    (2) Any  party  is  also  discharged  from his
liability on an instrument to another party by any
other act or agreement with such party which would
discharge  his simple contract for the payment  of
money.
    (3) The liability of all parties is discharged
when any party who has himself no right of  action
or recourse on the  instrument  (a) reacquires the
instrument in his own right; or (b) is  discharged
under any provision  of  this  article,  except as
otherwise   provided  by  section  42a-3-606  with
respect to discharge for impairment of recourse or
of collateral.]
    (a)  THE  OBLIGATION  OF A PARTY  TO  PAY  THE
INSTRUMENT IS DISCHARGED AS STATED IN THIS ARTICLE
OR  BY  AN ACT OR AGREEMENT WITH THE  PARTY  WHICH
WOULD DISCHARGE AN OBLIGATION TO PAY MONEY UNDER A
SIMPLE CONTRACT.
    (b) DISCHARGE OF THE OBLIGATION OF A PARTY  IS
NOT EFFECTIVE AGAINST A PERSON ACQUIRING RIGHTS OF
A  HOLDER IN DUE COURSE OF THE INSTRUMENT  WITHOUT
NOTICE OF THE DISCHARGE.
    Sec.  64.   Section  42a-3-602  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [No discharge of  any  party  provided by this
article  is effective against a subsequent  holder
in due course unless he has notice thereof when he
takes the instrument.]
    (a)  SUBJECT TO SUBSECTION (b), AN  INSTRUMENT
IS PAID TO THE EXTENT PAYMENT IS MADE (i) BY OR ON
BEHALF  OF A PARTY OBLIGED TO PAY THE  INSTRUMENT,
AND (ii) TO  A  PERSON  ENTITLED  TO  ENFORCE  THE
INSTRUMENT.   TO  THE EXTENT OF THE  PAYMENT,  THE
OBLIGATION  OF  THE   PARTY  OBLIGED  TO  PAY  THE
INSTRUMENT  IS  DISCHARGED EVEN THOUGH PAYMENT  IS
MADE WITH KNOWLEDGE OF A  CLAIM  TO THE INSTRUMENT
UNDER SECTION 42a-3-306 BY ANOTHER PERSON.
    (b)  THE  OBLIGATION  OF A PARTY  TO  PAY  THE
INSTRUMENT IS NOT DISCHARGED  UNDER SUBSECTION (a)
IF:   (1) A CLAIM TO THE INSTRUMENT UNDER  SECTION
42a-3-306  IS   ENFORCEABLE   AGAINST   THE  PARTY
RECEIVING  PAYMENT  AND (i) PAYMENT IS  MADE  WITH
KNOWLEDGE BY THE PAYOR THAT  PAYMENT IS PROHIBITED
BY  INJUNCTION  OR SIMILAR PROCESS OF A  COURT  OF
COMPETENT JURISDICTION, OR  (ii) IN THE CASE OF AN
INSTRUMENT OTHER THAN A CASHIER'S CHECK,  TELLER'S
CHECK,   OR  CERTIFIED  CHECK,   THE  PARTY MAKING
PAYMENT  ACCEPTED,  FROM THE PERSON HAVING A CLAIM
TO  THE   INSTRUMENT,    INDEMNITY   AGAINST  LOSS
RESULTING  FROM REFUSAL TO PAY THE PERSON ENTITLED
TO ENFORCE  THE  INSTRUMENT;   OR  (2)  THE PERSON
MAKING  PAYMENT  KNOWS THAT THE  INSTRUMENT  IS  A
STOLEN INSTRUMENT AND PAYS A PERSON IT KNOWS IS IN
WRONGFUL POSSESSION OF THE INSTRUMENT.
    Sec.   65.  Section 42a-3-603 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1) The liability of any party is  discharged
to the extent of  his  payment  or satisfaction to
the  holder even though it is made with  knowledge
of a claim of  another  person  to  the instrument
unless  prior to such payment or satisfaction  the
person making the claim either  supplies indemnity
deemed adequate by the party seeking the discharge
or enjoins payment or  satisfaction  by order of a
court  of  competent jurisdiction in an action  in
which the  adverse  claimant  and  the  holder are
parties. This subsection does not, however, result
in the discharge of the  liability  (a) of a party
who  in  bad faith pays or satisfies a holder  who
acquired the instrument  by  theft or who,  unless
having the rights of a holder in due course, holds
through one who so acquired it; or (b) of a party,
other  than  an intermediary bank or a payor  bank
which is  not  a  depositary  bank,   who  pays or
satisfies  the  holder of an instrument which  has
been  restrictively   endorsed  in  a  manner  not
consistent  with  the  terms of  such  restrictive
endorsement.
    (2) Payment or  satisfaction  may be made with
the consent of the holder by any person  including
a stranger to the  instrument.   Surrender  of the
instrument  to such a person gives him the  rights
of a transferee as provided in section 42a-3-201.]
    (a) IF TENDER OF  PAYMENT  OF AN OBLIGATION TO
PAY AN INSTRUMENT IS MADE TO A PERSON ENTITLED  TO
ENFORCE THE INSTRUMENT,   THE  EFFECT OF TENDER IS
GOVERNED BY PRINCIPLES OF LAW APPLICABLE TO TENDER
OF PAYMENT UNDER A SIMPLE CONTRACT.
    (b) IF TENDER OF  PAYMENT  OF AN OBLIGATION TO
PAY AN INSTRUMENT IS MADE TO A PERSON ENTITLED  TO
ENFORCE THE INSTRUMENT  AND THE TENDER IS REFUSED,
THERE IS DISCHARGE, TO THE EXTENT OF THE AMOUNT OF
THE TENDER,  OF THE  OBLIGATION  OF AN INDORSER OR
ACCOMMODATION  PARTY  HAVING A RIGHT  OF  RECOURSE
WITH RESPECT TO THE OBLIGATION TO WHICH THE TENDER
RELATES.
    (c)  IF TENDER OF PAYMENT OF AN AMOUNT DUE  ON
AN INSTRUMENT IS  MADE  TO  A  PERSON  ENTITLED TO
ENFORCE  THE  INSTRUMENT,  THE OBLIGATION  OF  THE
OBLIGOR TO PAY INTEREST AFTER  THE DUE DATE ON THE
AMOUNT  TENDERED IS DISCHARGED.  IF PRESENTMENT IS
REQUIRED WITH  RESPECT  TO  AN  INSTRUMENT AND THE
OBLIGOR  IS ABLE AND READY TO PAY ON THE DUE  DATE
AT  EVERY  PLACE   OF   PAYMENT   STATED   IN  THE
INSTRUMENT,   THE OBLIGOR IS DEEMED TO  HAVE  MADE
TENDER OF PAYMENT  ON  THE  DUE DATE TO THE PERSON
ENTITLED TO ENFORCE THE INSTRUMENT.
    Sec.   66.  Section 42a-3-604 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  Any party making tender of full  payment
to a holder when or after  it is due is discharged
to  the  extent of all  subsequent  liability  for
interest, costs and attorney's fees.
    (2) The holder's refusal of such tender wholly
discharges  any party who has a right of  recourse
against the party making the tender.
    (3)  Where  the   maker   or  acceptor  of  an
instrument  payable  otherwise than on  demand  is
able and ready to pay  at  every  place of payment
specified in the instrument when it is due, it  is
equivalent to tender.]
    (a)  A   PERSON   ENTITLED   TO   ENFORCE   AN
INSTRUMENT,  WITH OR WITHOUT  CONSIDERATION,   MAY
DISCHARGE  THE  OBLIGATION  OF  A PARTY TO PAY THE
INSTRUMENT  (i) BY AN INTENTIONAL  VOLUNTARY  ACT,
SUCH AS SURRENDER OF THE  INSTRUMENT TO THE PARTY,
DESTRUCTION,  MUTILATION,  OR CANCELLATION OF  THE
INSTRUMENT,   CANCELLATION  OR STRIKING OUT OF THE
PARTY'S SIGNATURE, OR THE ADDITION OF WORDS TO THE
INSTRUMENT  INDICATING   DISCHARGE,   OR  (ii)  BY
AGREEING NOT TO SUE OR OTHERWISE RENOUNCING RIGHTS
AGAINST THE PARTY BY A SIGNED WRITING.
    (b)  CANCELLATION  OR   STRIKING   OUT  OF  AN
INDORSEMENT  PURSUANT  TO SUBSECTION (a) DOES  NOT
AFFECT THE STATUS AND  RIGHTS  OF  A PARTY DERIVED
FROM THE INDORSEMENT.
    Sec.   67.  Section 42a-3-605 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  The  holder of an  instrument  may  even
without consideration  discharge  any party (a) in
any manner apparent on the face of the  instrument
or the endorsement, as by intentionally cancelling
the   instrument  or  the  party's  signature   by
destruction or  mutilation, or by striking out the
party's signature; or (b) by renouncing his rights
by a writing signed and  delivered or by surrender
of the instrument to the party to be discharged.
    (2)  Neither  cancellation  nor   renunciation
without surrender  of  the  instrument affects the
title thereto.]
    (a)  IN  THIS SECTION,   THE  TERM  "INDORSER"
INCLUDES A DRAWER HAVING  THE OBLIGATION DESCRIBED
IN SECTION 42a-3-414(d).
    (b)  DISCHARGE,  UNDER SECTION  42a-3-604,  OF
THE OBLIGATION OF  A  PARTY  TO  PAY AN INSTRUMENT
DOES  NOT DISCHARGE THE OBLIGATION OF AN  INDORSER
OR ACCOMMODATION PARTY HAVING  A RIGHT OF RECOURSE
AGAINST THE DISCHARGED PARTY.
    (c)   IF  A  PERSON  ENTITLED  TO  ENFORCE  AN
INSTRUMENT AGREES, WITH OR  WITHOUT CONSIDERATION,
TO AN EXTENSION OF THE DUE DATE OF THE  OBLIGATION
OF A PARTY TO PAY THE  INSTRUMENT,   THE EXTENSION
DISCHARGES  AN  INDORSER  OR  ACCOMMODATION  PARTY
HAVING A RIGHT OF RECOURSE AGAINST THE PARTY WHOSE
OBLIGATION  IS EXTENDED TO THE EXTENT THE INDORSER
OR ACCOMMODATION PARTY  PROVES  THAT THE EXTENSION
CAUSED LOSS TO THE INDORSER OR ACCOMMODATION PARTY
WITH RESPECT TO THE RIGHT OF RECOURSE.
    (d)  IF  A  PERSON   ENTITLED  TO  ENFORCE  AN
INSTRUMENT  AGREES, WITH OR WITHOUT CONSIDERATION,
TO A MATERIAL MODIFICATION  OF THE OBLIGATION OF A
PARTY OTHER THAN AN EXTENSION OF THE DUE DATE, THE
MODIFICATION   DISCHARGES   THE  OBLIGATION  OF AN
INDORSER OR ACCOMMODATION PARTY HAVING A RIGHT  OF
RECOURSE AGAINST  THE  PERSON  WHOSE OBLIGATION IS
MODIFIED  TO  THE EXTENT THE  MODIFICATION  CAUSES
LOSS TO THE INDORSER OR  ACCOMMODATION  PARTY WITH
RESPECT  TO  THE  RIGHT  OF  RECOURSE.   THE  LOSS
SUFFERED BY THE INDORSER OR ACCOMMODATION PARTY AS
A  RESULT  OF  THE MODIFICATION IS  EQUAL  TO  THE
AMOUNT OF THE RIGHT OF  RECOURSE UNLESS THE PERSON
ENFORCING  THE INSTRUMENT PROVES THAT NO LOSS  WAS
CAUSED BY THE MODIFICATION OR THAT THE LOSS CAUSED
BY  THE  MODIFICATION WAS AN AMOUNT LESS THAN  THE
AMOUNT OF THE RIGHT OF RECOURSE.
    (e) IF THE  OBLIGATION  OF  A  PARTY TO PAY AN
INSTRUMENT IS SECURED BY AN INTEREST IN COLLATERAL
AND A PERSON ENTITLED  TO  ENFORCE  THE INSTRUMENT
IMPAIRS  THE VALUE OF THE INTEREST IN  COLLATERAL,
THE OBLIGATION OF  AN  INDORSER  OR  ACCOMMODATION
PARTY  HAVING  A  RIGHT OF  RECOURSE  AGAINST  THE
OBLIGOR  IS  DISCHARGED   TO  THE  EXTENT  OF  THE
IMPAIRMENT. THE VALUE OF AN INTEREST IN COLLATERAL
IS IMPAIRED TO  THE  EXTENT  (i)  THE VALUE OF THE
INTEREST  IS  REDUCED TO AN AMOUNT LESS  THAN  THE
AMOUNT OF THE  RIGHT  OF  RECOURSE  OF  THE  PARTY
ASSERTING  DISCHARGE,   OR (ii) THE  REDUCTION  IN
VALUE OF THE  INTEREST  CAUSES  AN INCREASE IN THE
AMOUNT  BY  WHICH  THE  AMOUNT  OF  THE  RIGHT  OF
RECOURSE EXCEEDS THE  VALUE  OF THE INTEREST.  THE
BURDEN  OF  PROVING  IMPAIRMENT IS  ON  THE  PARTY
ASSERTING DISCHARGE.
    (f) IF THE OBLIGATION OF A PARTY IS SECURED BY
AN  INTEREST  IN  COLLATERAL NOT  PROVIDED  BY  AN
ACCOMMODATION  PARTY  AND  A  PERSON  ENTITLED  TO
ENFORCE  THE INSTRUMENT IMPAIRS THE VALUE  OF  THE
INTEREST IN  COLLATERAL,   THE  OBLIGATION  OF ANY
PARTY  WHO  IS JOINTLY AND SEVERALLY  LIABLE  WITH
RESPECT TO THE SECURED OBLIGATION IS DISCHARGED TO
THE   EXTENT  THE  IMPAIRMENT  CAUSES  THE   PARTY
ASSERTING DISCHARGE TO  PAY  MORE  THAN THAT PARTY
WOULD  HAVE  BEEN  OBLIGED TO  PAY,   TAKING  INTO
ACCOUNT RIGHTS OF CONTRIBUTION,  IF IMPAIRMENT HAD
NOT OCCURRED.  IF THE PARTY ASSERTING DISCHARGE IS
AN ACCOMMODATION PARTY  NOT  ENTITLED TO DISCHARGE
UNDER SUBSECTION (e), THE PARTY IS DEEMED TO  HAVE
A RIGHT TO CONTRIBUTION BASED ON JOINT AND SEVERAL
LIABILITY  RATHER  THAN A RIGHT TO  REIMBURSEMENT.
THE BURDEN OF PROVING  IMPAIRMENT  IS ON THE PARTY
ASSERTING DISCHARGE.
    (g)  UNDER  SUBSECTION (e) OR  (f),  IMPAIRING
VALUE OF AN INTEREST IN  COLLATERAL  INCLUDES  (i)
FAILURE  TO  OBTAIN  OR  MAINTAIN  PERFECTION   OR
RECORDATION OF THE  INTEREST  IN COLLATERAL,  (ii)
RELEASE  OF  COLLATERAL  WITHOUT  SUBSTITUTION  OF
COLLATERAL  OF  EQUAL  VALUE,   (iii)  FAILURE  TO
PERFORM A DUTY TO PRESERVE THE VALUE OF COLLATERAL
OWED, UNDER ARTICLE 9 OR OTHER LAW, TO A DEBTOR OR
SURETY OR OTHER PERSON SECONDARILY LIABLE, OR (iv)
FAILURE TO COMPLY WITH APPLICABLE LAW IN DISPOSING
OF COLLATERAL.
    (h)  AN ACCOMMODATION PARTY IS NOT  DISCHARGED
UNDER SUBSECTION (c), (d) OR (e) UNLESS THE PERSON
ENTITLED  TO ENFORCE THE INSTRUMENT KNOWS  OF  THE
ACCOMMODATION  OR   HAS   NOTICE   UNDER   SECTION
42a-3-419(c)  THAT THE INSTRUMENT WAS  SIGNED  FOR
ACCOMMODATION.
    (i) A  PARTY  IS  NOT  DISCHARGED  UNDER  THIS
SECTION  IF  (i)  THE  PARTY  ASSERTING  DISCHARGE
CONSENTS TO THE EVENT OR CONDUCT THAT IS THE BASIS
OF  THE  DISCHARGE,  OR (ii) THE INSTRUMENT  OR  A
SEPARATE  AGREEMENT  OF  THE  PARTY  PROVIDES  FOR
WAIVER  OF  DISCHARGE  UNDER THIS  SECTION  EITHER
SPECIFICALLY OR  BY  GENERAL  LANGUAGE  INDICATING
THAT PARTIES WAIVE DEFENSES BASED ON SURETYSHIP OR
IMPAIRMENT OF COLLATERAL.
    Sec.  68.   Section  42a-4-101  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    This article [shall be known and] may be cited
as  Uniform  Commercial  Code--Bank  Deposits  and
Collections.
    Sec.  69.   Section  42a-4-102  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1)] (a) To the extent that items within this
article are also within [the scope of] articles  3
and 8,  they  are  subject  to [the provisions of]
those  articles.   [In the event of] IF  THERE  IS
conflict,   [the   provisions   of]  this  article
[govern  those  of] GOVERNS article 3,   but  [the
provisions of] article 8 [govern those of] GOVERNS
this article.
    [(2)]  (b) The liability of a bank for  action
or nonaction with respect to [any] AN item handled
by  it  for purposes of presentment,  payment,  or
collection is  governed  by  the  law of the place
where the bank is located.  In the case of  action
or nonaction by or at a  branch or separate office
of a bank, its liability is governed by the law of
the place where the  branch  or separate office is
located.
    Sec.   70.  Section 42a-4-103 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)] (a) The effect of the provisions of this
article may be varied by agreement,   [except that
no agreement can] BUT THE PARTIES TO THE AGREEMENT
CANNOT disclaim a  bank's  responsibility  for its
[own]  lack of good faith or failure  to  exercise
ordinary  care  or  [can]  limit  the  measure  of
damages  for [such] THE lack or failure.  [;  but]
HOWEVER, the  parties  may  DETERMINE by agreement
[determine]  the  standards  by which  [such]  THE
BANK'S responsibility is to  be measured if [such]
THOSE standards are not manifestly unreasonable.
    [(2)]  (b)  Federal  reserve  regulations  and
operating  [letters,   clearing  house] CIRCULARS,
CLEARING-HOUSE  rules,  and the like [,] have  the
effect of agreements  under  subsection [(1)] (a),
whether  or  not specifically assented to  by  all
parties interested in items handled.
    [(3)] (c) Action or nonaction approved by this
article or pursuant to federal reserve regulations
or operating [letters  constitutes]  CIRCULARS  IS
the exercise of ordinary care and, in the  absence
of  special   instructions,  action  or  nonaction
consistent  with  [clearing house]  CLEARING-HOUSE
rules and the like or with a general banking usage
not  disapproved by this article, IS  prima  facie
[constitutes] the exercise of ordinary care.
    [(4)] (d)  The  specification  or  approval of
certain  procedures  by  this  article  [does  not
constitute] IS NOT disapproval of other procedures
[which]   THAT   may  be  reasonable   under   the
circumstances.
    [(5)] (e) The measure  of  damages for failure
to  exercise ordinary care in handling an item  is
the amount  of  the  item  reduced  by  an  amount
[which]  THAT could not have been realized by  the
[use] EXERCISE of ordinary care.  [, and where] IF
there  is  ALSO bad faith it  includes  ANY  other
damages [, if any, suffered by] the party SUFFERED
as a proximate consequence.
    Sec.   71.  Section 42a-4-104 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)] (a) In this article, unless the  context
otherwise requires:  [(a)] (1) "Account" means any
DEPOSIT  OR  CREDIT  account  with a  bank,   [and
includes a checking,   time,   interest or savings
account]  INCLUDING  A  DEMAND,   TIME,   SAVINGS,
PASSBOOK, SHARE DRAFT, OR LIKE ACCOUNT, OTHER THAN
AN  ACCOUNT EVIDENCED BY A CERTIFICATE OF DEPOSIT;
[(b)] (2) "afternoon"  means  the  period of a day
between noon and midnight; [(c)] (3) "banking day"
means [that] THE part  of  [any]  A day on which a
bank  is  open  to  the  public  for  carrying  on
substantially all of its  banking  functions,  but
for  the purpose of determining a bank's  midnight
deadline, as defined  in  [subsection  (h) of this
section]  SUBDIVISION  (10)  OF  THIS  SUBSECTION,
shall not include  Saturday;   [(d)] (4) "clearing
house"  means  [any]  AN association of  banks  or
other payors regularly clearing  items;  [(e)] (5)
"customer" means [any] A person having an  account
with a bank  or  for  whom  a  bank  has agreed to
collect  items,  [and includes]  INCLUDING a  bank
[carrying]  THAT  MAINTAINS  an  account [with] AT
another bank; [(f)] (6) "documentary draft"  means
[any  negotiable  or   nonnegotiable   draft  with
accompanying documents, securities or other papers
to be  delivered  against  honor  of  the draft] A
DRAFT TO BE PRESENTED FOR ACCEPTANCE OR PAYMENT IF
SPECIFIED  DOCUMENTS,    CERTIFICATED   SECURITIES
(SECTION    42a-8-102)   OR    INSTRUCTIONS    FOR
UNCERTIFICATED SECURITIES (SECTION 42a-8-309),  OR
OTHER CERTIFICATES, STATEMENTS, OR THE LIKE ARE TO
BE RECEIVED BY  THE  DRAWEE  OR OTHER PAYOR BEFORE
ACCEPTANCE  OR  PAYMENT OF THE DRAFT; (7)  "DRAFT"
MEANS A DRAFT AS DEFINED  IN  SECTION 42a-3-104 OR
AN  ITEM,   OTHER THAN AN INSTRUMENT, THAT  IS  AN
ORDER; (8)  "DRAWEE"  MEANS  A PERSON ORDERED IN A
DRAFT TO MAKE PAYMENT; [(g)] (9) "item" means [any
instrument for the payment of money even though it
is  not negotiable but does not include money]  AN
INSTRUMENT  OR  A  PROMISE  OR  ORDER TO PAY MONEY
HANDLED BY A BANK FOR COLLECTION OR PAYMENT.   THE
TERM DOES NOT INCLUDE A  PAYMENT ORDER GOVERNED BY
ARTICLE  4A OR A CREDIT OR DEBIT CARD SLIP;  [(h)]
(10) "midnight deadline" with respect to a bank is
midnight  on  its next banking day  following  the
banking day on which it receives the relevant item
or notice or from which the time for taking action
commences  to  run,   whichever  is  later;   [(i)
"properly  payable" includes the  availability  of
funds for payment at the  time  of decision to pay
or  dishonor;  (j)] (11) "settle" means to pay  in
cash,    by   [clearing    house]   CLEARING-HOUSE
settlement,    in  a  charge  or  credit   or   by
remittance, or otherwise as [instructed] AGREED. A
settlement  may  be either provisional  or  final;
[(k)] (12) "suspends  payments"  with respect to a
bank means that it has been closed by order of the
supervisory authorities, that a public officer has
been appointed to take it over, or that it  ceases
or refuses to make payments in the ordinary course
of business.
    [(2)]  (b) Other definitions applying to  this
article and the sections in which they appear are:
    "AGREEMENT FOR ELECTRONIC PRESENTMENT". SECTION 77.
    "BANK". SECTION 42a-4-105.
    "Collecting bank". Section 42a-4-105.
    "Depositary bank". Section 42a-4-105.
    "Intermediary bank". Section 42a-4-105.
    "Payor bank". Section 42a-4-105.
    "Presenting bank". Section 42a-4-105.
    "PRESENTMENT NOTICE". SECTION 77 OF THIS ACT.
    ["Remitting bank". Section 42a-4-105.]
    [(3)] (c) The  following  definitions in other
articles apply to this article:
    "Acceptance". Section [42a-3-410] 42a-3-409.
    "ALTERATION". SECTION 42a-3-407.
    "CASHIER'S CHECK". SECTION 42a-3-104.
    "Certificate of deposit". Section 42a-3-104.
    ["Certification". Section 42a-3-411.]
    "CERTIFIED CHECK". SECTION 42a-3-409.
    "Check". Section 42a-3-104.
    ["Draft. Section 42a-3-104.]
    "GOOD FAITH". SECTION 42a-3-103.
    "Holder in due course". Section 42a-3-302.
    "INSTRUMENT". SECTION 42a-3-104.
    "Notice of dishonor". Section [42a-3-508] 42a-3-503.
    "ORDER". SECTION 42a-3-103.
    "ORDINARY CARE". SECTION 42a-3-103.
    "PERSON ENTITLED TO ENFORCE". SECTION 42a-3-301.
    "Presentment". Section [42a-3-504] 42a-3-501.
    "PROMISE". SECTION 42a-3-103.
    ["Protest". Section 42a-3-509.]
    "PROVE". SECTION 42a-3-103.
    ["Secondary party". Section 42a-3-102.]
    "TELLER'S CHECK". SECTION 42a-3-104.
    "UNAUTHORIZED SIGNATURE". SECTION 42a-3-403.
    [(4)]  (d)  In addition,   article 1  contains
general definitions and principles of construction
and  interpretation  applicable  throughout   this
article.
    Sec.  72.   Section  42a-4-105  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    In  this   article:    [unless   the   context
otherwise requires:]
    (1)  "BANK"  MEANS  A PERSON  ENGAGED  IN  THE
BUSINESS OF BANKING,   INCLUDING  A  SAVINGS BANK,
SAVINGS  AND LOAN ASSOCIATION,  CREDIT  UNION,  OR
TRUST COMPANY;
    [(a)] (2)  "Depositary  bank"  means the first
bank  to [which] TAKE an item [is transferred  for
collection] even though it is also the payor bank,
UNLESS THE ITEM IS PRESENTED FOR IMMEDIATE PAYMENT
OVER THE COUNTER;
    [(b)] (3) "Payor bank"  means a bank [by which
an  item is payable as drawn or accepted] THAT  IS
THE DRAWEE OF A DRAFT;
    [(c)]  (4)  "Intermediary  bank" means [any] A
bank  to which an item is transferred in course of
collection except the depositary or payor bank;
    [(d)] (5) "Collecting bank" means [any] A bank
handling  [the] AN item for collection except  the
payor bank;
    [(e)] (6) "Presenting bank" means [any] A bank
presenting an item except a payor bank. [;]
    [(f)  "Remitting  bank"  means  any  payor  or
intermediary bank remitting for an item.]
    Sec.  73.   Section  42a-4-106  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [A branch or  separate  office  of a bank is a
separate  bank  for the purpose of  computing  the
time within which and  determining the place at or
to  which action may be taken or notice or  orders
shall  be  given  under  this  article  and  under
article  3,  except  that service on the  bank  as
garnishee  shall  be   made  pursuant  to  section
52-337.]
    (a)  IF  AN ITEM STATES THAT  IT  IS  "PAYABLE
THROUGH" A BANK  IDENTIFIED  IN THE ITEM,  (i) THE
ITEM DESIGNATES THE BANK AS A COLLECTING BANK  AND
DOES NOT BY ITSELF  AUTHORIZE  THE BANK TO PAY THE
ITEM,   AND  (ii) THE ITEM MAY  BE  PRESENTED  FOR
PAYMENT ONLY BY OR THROUGH THE BANK.
    (b) IF AN ITEM STATES  THAT IT IS "PAYABLE AT"
A  BANK  IDENTIFIED  IN  THE ITEM,   THE  ITEM  IS
EQUIVALENT TO A DRAFT DRAWN ON THE BANK.
    (c) IF A DRAFT NAMES A  NONBANK  DRAWEE AND IT
IS UNCLEAR WHETHER A BANK NAMED IN THE DRAFT IS  A
CO-DRAWEE OR  A  COLLECTING  BANK,   THE BANK IS A
COLLECTING BANK.
    Sec.   74.  Section 42a-4-107 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  For  the  purpose of  allowing  time  to
process  items,   prove   balances  and  make  the
necessary  entries  on its books to determine  its
position for the day, a bank  may fix an afternoon
hour of two p.m. or later as a cutoff hour for the
handling of money  and  items  and  the  making of
entries on its books.
    (2)  Any item or deposit of money received  on
any day after a cutoff hour  so fixed or after the
close  of the banking day or on any day  which  is
not a banking day may be treated as being received
at the opening of the next banking day.]
    A  BRANCH  OR SEPARATE OFFICE OF A BANK  IS  A
SEPARATE BANK FOR  THE  PURPOSE  OF  COMPUTING THE
TIME  WITHIN WHICH AND DETERMINING THE PLACE AT OR
TO WHICH ACTION MAY BE  TAKEN  OR NOTICE OR ORDERS
MUST BE GIVEN UNDER THIS ARTICLE AND UNDER ARTICLE
3.
    Sec.  75.   Section  42a-4-108  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1)   Unless    otherwise    instructed,    a
collecting  bank in a good faith effort to  secure
payment may,  in the  case  of  specific items and
with   or  without  the  approval  of  any  person
involved,  waive,   modify  or  extend time limits
imposed  or permitted by this title  for a  period
not in excess of an additional banking day without
discharge   of  secondary  parties   and   without
liability to its transferor or any prior party.
    (2) Delay by a  collecting  bank or payor bank
beyond time limits prescribed or permitted by this
title or by instructions  is  excused if caused by
interruption    of    communication    facilities,
suspension  of  payments  by  another  bank,   war
emergency conditions or other circumstances beyond
the control of the bank provided it exercises such
diligence as the circumstances require.]
    (a)  FOR  THE  PURPOSE  OF  ALLOWING  TIME  TO
PROCESS  ITEMS,   PROVE  BALANCES,   AND  MAKE THE
NECESSARY  ENTRIES  ON ITS BOOKS TO DETERMINE  ITS
POSITION FOR THE DAY, A BANK  MAY FIX AN AFTERNOON
HOUR OF TWO O'CLOCK P.M. OR LATER AS A CUTOFF HOUR
FOR THE HANDLING OF MONEY AND ITEMS AND THE MAKING
OF ENTRIES ON ITS BOOKS.
    (b)  AN ITEM OR DEPOSIT OF MONEY  RECEIVED  ON
ANY DAY AFTER A CUTOFF  HOUR SO FIXED OR AFTER THE
CLOSE  OF THE BANKING DAY MAY BE TREATED AS  BEING
RECEIVED AT THE OPENING OF THE NEXT BANKING DAY.
    Sec.  76.   Section  42a-4-109  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [The  "process  of  posting"  means  the usual
procedure  followed by a payor bank in determining
to pay  an  item  and  in  recording  the  payment
including  one  or more of the following or  other
steps as determined by the  bank: (a) Verification
of any signature; (b) ascertaining that sufficient
funds are  available;   (c)  affixing  a "paid" or
other  stamp; (d) entering a charge or entry to  a
customer's account; (e) correcting or reversing an
entry  or  erroneous  action with respect  to  the
item.]
    (a) UNLESS OTHERWISE  INSTRUCTED, A COLLECTING
BANK IN A GOOD FAITH EFFORT TO SECURE PAYMENT OF A
SPECIFIC ITEM DRAWN ON A  PAYOR OTHER THAN A BANK,
AND  WITH  OR WITHOUT THE APPROVAL OF  ANY  PERSON
INVOLVED, MAY WAIVE, MODIFY, OR EXTEND TIME LIMITS
IMPOSED  OR  PERMITTED BY THIS TITLE FOR A  PERIOD
NOT EXCEEDING TWO ADDITIONAL  BANKING DAYS WITHOUT
DISCHARGE OF DRAWERS OR INDORSERS OR LIABILITY  TO
ITS TRANSFEROR OR A PRIOR PARTY.
    (b) DELAY BY A  COLLECTING  BANK OR PAYOR BANK
BEYOND TIME LIMITS PRESCRIBED OR PERMITTED BY THIS
TITLE OR  BY  INSTRUCTIONS  IS  EXCUSED IF (i) THE
DELAY  IS CAUSED BY INTERRUPTION OF  COMMUNICATION
OR COMPUTER FACILITIES,  SUSPENSION OF PAYMENTS BY
ANOTHER  BANK, WAR, EMERGENCY CONDITIONS,  FAILURE
OF EQUIPMENT,  OR OTHER  CIRCUMSTANCES  BEYOND THE
CONTROL  OF THE BANK, AND (ii) THE BANK  EXERCISES
SUCH DILIGENCE AS THE CIRCUMSTANCES REQUIRE.
    Sec.  77.  (NEW) (a) "Agreement for electronic
presentment"  means an agreement,   clearing-house
rule,  or Federal Reserve  regulation or operating
circular,  providing that presentment of  an  item
may be made by transmission of an image of an item
or  information describing the item  ("presentment
notice") rather than  delivery of the item itself.
The agreement may provide for procedures governing
retention,  presentment,  payment,  dishonor,  and
other  matters  concerning  items subject  to  the
agreement.
    (b)  Presentment  of  an  item  pursuant to an
agreement   for  presentment  is  made  when   the
presentment notice is received.
    (c)  If  presentment  is  made  by presentment
notice,  a reference to "item" or "check" in  this
article means  the  presentment  notice unless the
context otherwise indicates.
    Sec.   78.   (NEW)  An action  to  enforce  an
obligation, duty,   or  right  arising  under this
article must be commenced within three years after
the cause of action accrues.
    Sec.  79.   Section  42a-4-201  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1)] (a) Unless  a  contrary  intent  clearly
appears  and  [prior to] BEFORE the  time  that  a
settlement given by a  collecting bank for an item
is  or  becomes final, [as provided in  subsection
(3) of section  42a-4-211  and  sections 42a-4-212
and 42a-4-213] the bank, WITH RESPECT TO THE ITEM,
is an agent or subagent  of  the owner of the item
and   any  settlement  given  for  the   item   is
provisional.  This provision applies regardless of
the form of endorsement or lack of endorsement and
even though credit given  for  the item is subject
to immediate withdrawal as of right or is in  fact
withdrawn;  but the continuance of ownership of an
item  by its owner and any rights of the owner  to
proceeds of the  item  are  subject to rights of a
collecting  bank  such  as  those  resulting  from
outstanding advances on  the item and valid rights
of  RECOUPMENT OR set-off.  [When] IF an  item  is
handled by  banks  for  purposes  of  presentment,
payment, [and] collection, OR RETURN, the relevant
provisions  of  this  article  apply  even  though
action  of THE parties clearly establishes that  a
particular bank has purchased  the item and is the
owner of it.
    [(2)] (b) After an item has been endorsed with
the words "pay any bank" or  the like, only a bank
may acquire the rights of a holder UNTIL THE  ITEM
HAS BEEN:  [(a) until  the item has been returned]
(1)    RETURNED   to   the   customer   initiating
collection;   or  [(b)  until  the  item  has been
specially]  (2) SPECIALLY endorsed by a bank to  a
person who is not a bank.
    Sec.  80.   Section  42a-4-202  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1)]  (a)  A   collecting   bank  must  [use]
exercise  ordinary care in:  [(a) presenting]  (1)
PRESENTING an item or  sending it for presentment;
[and  (b)]  (2)  sending  notice  of  dishonor  or
nonpayment  or  returning  an  item  other  than a
documentary  draft  to the bank's  transferor  [or
directly to the  depositary  bank under subsection
(2)  of section 42a-4-212] after learning that the
item has not been paid  or  accepted,  as the case
may  be; [and (c)] (3) settling for an  item  when
the  bank  receives  final  settlement;   and [(d)
making or providing for any necessary protest; and
(e)] (4) notifying its  transferor  of any loss or
delay  in transit within a reasonable  time  after
discovery thereof.
    [(2) A  collecting  bank  taking proper action
before  its midnight deadline following receipt of
an item, notice or payment acts seasonably; taking
proper action within a reasonably longer time  may
be seasonable but  the  bank  has the burden of so
establishing.]
    (b) A COLLECTING BANK EXERCISES ORDINARY  CARE
UNDER  SUBSECTION  (a)  BY  TAKING  PROPER  ACTION
BEFORE ITS MIDNIGHT DEADLINE FOLLOWING RECEIPT  OF
AN ITEM,  NOTICE,  OR  SETTLEMENT.   TAKING PROPER
ACTION   WITHIN  A  REASONABLY  LONGER  TIME   MAY
CONSTITUTE THE EXERCISE OF  ORDINARY CARE, BUT THE
BANK HAS THE BURDEN OF ESTABLISHING TIMELINESS.
    [(3)] (c) Subject to subsection [(1) (a)]  (a)
(1), a bank  is  not  liable  for  the insolvency,
neglect,   misconduct,   mistake,  or  default  of
another bank or person  or for loss or destruction
of  an  item  IN THE POSSESSION OF  OTHERS  OR  in
transit. [or in the possession of others.]
    Sec.  81.   Section  42a-4-203  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    Subject  to   [the   provisions   of   section
42a-3-419]  SECTION  57  OF  THIS  ACT  concerning
conversion of  instruments  and [the provisions of
both   article  3  and  this  article  concerning]
restrictive endorsements (SECTION 42a-3-206), only
a   collecting   bank's   transferor   can    give
instructions  [which]   THAT  affect  the  bank or
constitute  notice to it, and a collecting bank is
not liable to prior  parties  for any action taken
pursuant   to   [such]  THE  instructions  or   in
accordance with any agreement with its transferor.
    Sec.  82.   Section  42a-4-204  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1)] (a) A collecting  bank [must] SHALL send
items  by A reasonably prompt method,  taking into
consideration [any]  relevant  instructions,   the
nature  of  the item, the number of  [such]  THOSE
items on  hand,   [and]  the  cost  of  collection
involved,  and the method generally used by it  or
others to present [such] THOSE items.
    [(2)] (b)  A  collecting  bank  may send: [(a)
any]  (1) AN item [direct] DIRECTLY to  the  payor
bank;  [(b) any] (2)  AN  item  to [any] A nonbank
payor  if authorized by its transferor;  and  [(c)
any] (3) AN item other  than documentary drafts to
[any]  A  nonbank payor, if authorized by  federal
reserve regulation or operating  [letter, clearing
house] CIRCULAR, CLEARING-HOUSE rule, or the like.
    [(3)]   (c)  Presentment  may  be  made  by  a
presenting bank at a place where the payor bank OR
OTHER  PAYOR  has requested  that  presentment  be
made.
    Sec.  83.   Section  42a-4-205  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1) A depositary bank which has taken an item
for  collection may supply any endorsement of  the
customer which is  necessary  to  title unless the
item   contains  the  words  "payee's  endorsement
required" or the like.   In  the absence of such a
requirement a statement placed on the item by  the
depositary bank to  the  effect  that the item was
deposited by a customer or credited to his account
is effective as the customer's endorsement.
    (2) An intermediary  bank, or payor bank which
is  not a depositary bank, is neither given notice
nor   otherwise   affected    by   a   restrictive
endorsement  of  any  person  except  the   bank's
immediate transferor.]
    IF A CUSTOMER DELIVERS AN ITEM TO A DEPOSITARY
BANK  FOR  COLLECTION:  (1)  THE  DEPOSITARY  BANK
BECOMES A  HOLDER  OF  THE  ITEM  AT  THE  TIME IT
RECEIVES  THE ITEM FOR COLLECTION IF THE  CUSTOMER
AT THE TIME OF DELIVERY WAS  A HOLDER OF THE ITEM,
WHETHER  OR  NOT THE CUSTOMER INDORSES  THE  ITEM,
AND,  IF THE BANK SATISFIES THE OTHER REQUIREMENTS
OF  SECTION  42a-3-302,   IT IS A  HOLDER  IN  DUE
COURSE;  AND (2) THE  DEPOSITARY  BANK WARRANTS TO
COLLECTING  BANKS, THE PAYOR BANK OR OTHER  PAYOR,
AND THE DRAWER THAT  THE  AMOUNT  OF  THE ITEM WAS
PAID   TO   THE  CUSTOMER  OR  DEPOSITED  TO   THE
CUSTOMER'S ACCOUNT.
    Sec.  84.   Section  42a-4-206  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    Any agreed method  [which] THAT identifies the
transferor  bank  is  sufficient  for  the  item's
further transfer to another bank.
    Sec.  85.   Section  42a-4-207  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1)  Each  customer  or  collecting  bank who
obtains  payment or acceptance of an item and each
prior customer and collecting bank warrants to the
payor  bank or other payor who in good faith  pays
or accepts the item that  (a)  he has a good title
to  the item or is authorized to obtain payment or
acceptance on behalf of one  who has a good title;
and (b) he has no knowledge that the signature  of
the maker or drawer is  unauthorized,  except that
this  warranty  is not given by  any  customer  or
collecting bank that is a holder in due course and
acts  in good faith (i) to a maker with respect to
the maker's own  signature;   or  (ii) to a drawer
with  respect  to  the  drawer's  own   signature,
whether or not the  drawer  is also the drawee; or
(iii)  to an acceptor of an item if the holder  in
due course took the item  after  the acceptance or
obtained the acceptance without knowledge that the
drawer's signature was  unauthorized;  and (c) the
item has not been materially altered, except  that
this warranty  is  not  given  by  any customer or
collecting bank that is a holder in due course and
acts in good faith (i)  to the maker of a note; or
(ii)  to the drawer of a draft whether or not  the
drawer  is  also  the  drawee;   or  (iii)  to the
acceptor  of an item with respect to an alteration
made prior to the acceptance  if the holder in due
course  took the item after the acceptance,   even
though  the   acceptance   provided   "payable  as
originally  drawn" or equivalent terms; or (iv) to
the  acceptor  of  an  item  with  respect  to  an
alteration made after the acceptance.
    (2)  Each  customer and  collecting  bank  who
transfers an item  and  receives  a  settlement or
other   consideration  for  it  warrants  to   his
transferee and to any  subsequent  collecting bank
who takes the item in good faith that (a) he has a
good title to the item  or is authorized to obtain
payment  or acceptance on behalf of one who has  a
good title and the transfer is otherwise rightful;
and  (b) all signatures are genuine or authorized;
and (c) the item has not been  materially altered;
and  (d) no defense of any party is  good  against
him; and (e) he has no knowledge of any insolvency
proceeding instituted with respect to the maker or
acceptor or the drawer  of an unaccepted item.  In
addition  each  customer  and collecting  bank  so
transferring an item and receiving a settlement or
other consideration engages that upon dishonor and
any necessary notice of  dishonor  and  protest he
will take up the item.
    (3) The warranties and the engagement to honor
set forth in the two  preceding  subsections arise
notwithstanding  the  absence  of  endorsement  or
words of guaranty or  warranty  in the transfer or
presentment  and a collecting bank remains  liable
for  their  breach   despite   remittance  to  its
transferor.  Damages for breach of such warranties
or  engagement  to  honor  shall  not  exceed  the
consideration   received   by  the   customer   or
collecting bank  responsible  plus finance charges
and expenses related to the item, if any.
    (4)  Unless  a claim for  breach  of  warranty
under this section  is  made  within  a reasonable
time  after  the  person claiming  learns  of  the
breach, the  person  liable  is  discharged to the
extent  of any loss caused by the delay in  making
claim.]
    (a)  A  CUSTOMER  OR   COLLECTING   BANK  THAT
TRANSFERS  AN  ITEM AND RECEIVES A  SETTLEMENT  OR
OTHER CONSIDERATION WARRANTS TO THE TRANSFEREE AND
TO  ANY SUBSEQUENT COLLECTING BANK THAT:  (1)  THE
WARRANTOR IS A  PERSON  ENTITLED  TO  ENFORCE  THE
ITEM; (2) ALL SIGNATURES ON THE ITEM ARE AUTHENTIC
AND AUTHORIZED; (3) THE ITEM HAS NOT BEEN ALTERED;
(4) THE ITEM IS NOT SUBJECT TO A DEFENSE OR  CLAIM
IN RECOUPMENT (SECTION  42a-3-305(a)) OF ANY PARTY
THAT  CAN BE ASSERTED AGAINST THE WARRANTOR;   AND
(5)  THE  WARRANTOR   HAS   NO  KNOWLEDGE  OF  ANY
INSOLVENCY  PROCEEDING COMMENCED WITH  RESPECT  TO
THE MAKER  OR  ACCEPTOR  OR,   IN  THE  CASE OF AN
UNACCEPTED DRAFT, THE DRAWER.
    (b)  IF AN ITEM IS DISHONORED, A  CUSTOMER  OR
COLLECTING   BANK   TRANSFERRING   THE   ITEM  AND
RECEIVING  SETTLEMENT  OR OTHER  CONSIDERATION  IS
OBLIGED TO PAY  THE  AMOUNT  DUE  ON  THE ITEM (i)
ACCORDING TO THE TERMS OF THE ITEM AT THE TIME  IT
WAS TRANSFERRED, OR (ii) IF THE TRANSFER WAS OF AN
INCOMPLETE  ITEM,   ACCORDING  TO ITS  TERMS  WHEN
COMPLETED AS  STATED  IN  SECTIONS  42a-3-115  AND
42a-3-407.  THE OBLIGATION OF A TRANSFEROR IS OWED
TO THE TRANSFEREE AND TO ANY SUBSEQUENT COLLECTING
BANK  THAT  TAKES  THE  ITEM  IN  GOOD  FAITH.   A
TRANSFEROR  CANNOT  DISCLAIM  ITS OBLIGATION UNDER
THIS  SUBSECTION BY AN INDORSEMENT STATING THAT IT
IS   MADE   "WITHOUT    RECOURSE"   OR   OTHERWISE
DISCLAIMING LIABILITY.
    (c)  A  PERSON TO WHOM  THE  WARRANTIES  UNDER
SUBSECTION (a) ARE MADE  AND  WHO TOOK THE ITEM IN
GOOD  FAITH  MAY  RECOVER FROM  THE  WARRANTOR  AS
DAMAGES FOR BREACH OF WARRANTY  AN AMOUNT EQUAL TO
THE  LOSS SUFFERED AS A RESULT OF THE BREACH,  BUT
NOT MORE THAN THE AMOUNT OF THE ITEM PLUS EXPENSES
AND  LOSS OF INTEREST INCURRED AS A RESULT OF  THE
BREACH.
    (d) THE  WARRANTIES  STATED  IN SUBSECTION (a)
CANNOT  BE  DISCLAIMED  WITH  RESPECT  TO  CHECKS.
UNLESS NOTICE OF A CLAIM FOR BREACH OF WARRANTY IS
GIVEN  TO  THE WARRANTOR WITHIN THIRTY DAYS  AFTER
THE CLAIMANT HAS REASON TO  KNOW OF THE BREACH AND
THE  IDENTITY OF THE WARRANTOR,  THE WARRANTOR  IS
DISCHARGED TO THE EXTENT OF ANY LOSS CAUSED BY THE
DELAY IN GIVING NOTICE OF THE CLAIM.
    (e)  A CAUSE OF ACTION FOR BREACH OF  WARRANTY
UNDER THIS SECTION  ACCRUES  WHEN THE CLAIMANT HAS
REASON TO KNOW OF THE BREACH.
    Sec.   86.  Section 42a-4-208 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1) A bank has a security interest in an item
and any accompanying documents  or the proceeds of
either  (a)  in case of an item  deposited  in  an
account to the  extent  to  which credit given for
the  item  has been withdrawn or applied;  (b)  in
case of an  item  for  which  it  has given credit
available  for  withdrawal  as of  right,  to  the
extent of  the  credit  given  whether  or not the
credit is drawn upon and whether or not there is a
right  of  charge-back;  or  (c)  if  it  makes an
advance on or against the item.
    (2)  When  credit  which has  been  given  for
several items received at  one time or pursuant to
a single agreement is withdrawn or applied in part
the security interest remains  upon all the items,
any  accompanying  documents or  the  proceeds  of
either.  For the purpose of this section,  credits
first given are first withdrawn.
    (3)  Receipt by a collecting bank  of a  final
settlement for an  item  is  a  realization on its
security   interest  in  the  item,   accompanying
documents and proceeds.  To the extent and so long
as  the bank does not receive final settlement for
the item or give  up  possession  of  the  item or
accompanying  documents  for purposes  other  than
collection, the security interest continues and is
subject to the provisions of article 9 except that
(a) no security agreement is necessary to make the
security  interest enforceable; and (b) no  filing
is required to perfect the security interest;  and
(c)  the  security  interest  has  priority   over
conflicting  perfected  security  interests in the
item, accompanying documents or proceeds.]
    (a) IF AN UNACCEPTED DRAFT IS PRESENTED TO THE
DRAWEE FOR PAYMENT OR  ACCEPTANCE  AND  THE DRAWEE
PAYS   OR  ACCEPTS  THE  DRAFT,  (i)  THE   PERSON
OBTAINING PAYMENT  OR  ACCEPTANCE,  AT THE TIME OF
PRESENTMENT, AND (ii) A PREVIOUS TRANSFEROR OF THE
DRAFT, AT THE TIME  OF  TRANSFER,   WARRANT TO THE
DRAWEE  THAT  PAYS  OR ACCEPTS THE DRAFT  IN  GOOD
FAITH THAT: (1) THE WARRANTOR  IS, OR WAS,  AT THE
TIME THE WARRANTOR TRANSFERRED THE DRAFT, A PERSON
ENTITLED TO ENFORCE  THE  DRAFT  OR  AUTHORIZED TO
OBTAIN  PAYMENT  OR  ACCEPTANCE OF  THE  DRAFT  ON
BEHALF OF A PERSON  ENTITLED TO ENFORCE THE DRAFT;
(2)  THE  DRAFT HAS NOT BEEN ALTERED; AND (3)  THE
WARRANTOR HAS NO  KNOWLEDGE  THAT THE SIGNATURE OF
THE PURPORTED DRAWER OF THE DRAFT IS UNAUTHORIZED.
    (b) A DRAWEE MAKING PAYMENT MAY RECOVER FROM A
WARRANTOR DAMAGES FOR BREACH  OF WARRANTY EQUAL TO
THE AMOUNT PAID BY THE DRAWEE LESS THE AMOUNT  THE
DRAWEE RECEIVED OR IS ENTITLED TO RECEIVE FROM THE
DRAWER  BECAUSE OF THE PAYMENT.  IN ADDITION,  THE
DRAWEE IS ENTITLED TO  COMPENSATION  FOR  EXPENSES
AND  LOSS OF INTEREST RESULTING FROM  THE  BREACH.
THE RIGHT OF THE DRAWEE  TO  RECOVER DAMAGES UNDER
THIS SUBSECTION IS NOT AFFECTED BY ANY FAILURE  OF
THE DRAWEE TO  EXERCISE  ORDINARY  CARE  IN MAKING
PAYMENT.   IF  THE DRAWEE ACCEPTS  THE  DRAFT  (i)
BREACH OF WARRANTY IS A  DEFENSE TO THE OBLIGATION
OF  THE ACCEPTOR,  AND (ii) IF THE ACCEPTOR  MAKES
PAYMENT WITH RESPECT TO THE DRAFT, THE ACCEPTOR IS
ENTITLED TO RECOVER FROM A WARRANTOR FOR BREACH OF
WARRANTY THE AMOUNTS STATED IN THIS SUBSECTION.
    (c) IF A DRAWEE  ASSERTS A CLAIM FOR BREACH OF
WARRANTY   UNDER   SUBSECTION  (a)  BASED  ON   AN
UNAUTHORIZED   INDORSEMENT   OF   THE  DRAFT OR AN
ALTERATION OF THE DRAFT, THE WARRANTOR MAY  DEFEND
BY PROVING THAT THE INDORSEMENT IS EFFECTIVE UNDER
SECTION  42a-3-404  OR 42a-3-405 OR THE DRAWER  IS
PRECLUDED UNDER  SECTION  42a-3-406  OR  42a-4-406
FROM ASSERTING AGAINST THE DRAWEE THE UNAUTHORIZED
INDORSEMENT OR ALTERATION.
    (d) IF (i) A DISHONORED DRAFT IS PRESENTED FOR
PAYMENT  TO THE DRAWER OR AN INDORSER OR (ii)  ANY
OTHER ITEM IS  PRESENTED  FOR  PAYMENT  TO A PARTY
OBLIGED TO PAY THE ITEM, AND THE ITEM IS PAID, THE
PERSON OBTAINING PAYMENT AND A PRIOR TRANSFEROR OF
THE  ITEM WARRANT TO THE PERSON MAKING PAYMENT  IN
GOOD FAITH THAT THE  WARRANTOR  IS, OR WAS, AT THE
TIME THE WARRANTOR TRANSFERRED THE ITEM, A  PERSON
ENTITLED  TO  ENFORCE  THE  ITEM  OR AUTHORIZED TO
OBTAIN  PAYMENT ON BEHALF OF A PERSON ENTITLED  TO
ENFORCE THE ITEM.  THE  PERSON  MAKING PAYMENT MAY
RECOVER FROM ANY WARRANTOR FOR BREACH OF  WARRANTY
AN AMOUNT EQUAL TO THE  AMOUNT  PAID PLUS EXPENSES
AND LOSS OF INTEREST RESULTING FROM THE BREACH.
    (e)  THE WARRANTIES STATED IN SUBSECTIONS  (a)
AND (d)  CANNOT  BE  DISCLAIMED  WITH  RESPECT  TO
CHECKS.   UNLESS  NOTICE OF A CLAIM FOR BREACH  OF
WARRANTY IS GIVEN TO THE  WARRANTOR  WITHIN THIRTY
DAYS  AFTER THE CLAIMANT HAS REASON TO KNOW OF THE
BREACH AND THE  IDENTITY  OF  THE  WARRANTOR,  THE
WARRANTOR  IS DISCHARGED TO THE EXTENT OF ANY LOSS
CAUSED BY THE DELAY IN GIVING NOTICE OF THE CLAIM.
    (f) A CAUSE OF ACTION  FOR  BREACH OF WARRANTY
UNDER  THIS SECTION ACCRUES WHEN THE CLAIMANT  HAS
REASON TO KNOW OF THE BREACH.
    Sec.  87.   Section  42a-4-209  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [For purposes of  determining  its status as a
holder in due course, the bank has given value  to
the extent that it has a  security  interest in an
item  provided  that the bank  otherwise  complies
with the requirements of section 42a-3-302 on what
constitutes a holder in due course.]
    (a)  A  PERSON WHO ENCODES INFORMATION  ON  OR
WITH RESPECT TO AN ITEM  AFTER  ISSUE  WARRANTS TO
ANY  SUBSEQUENT COLLECTING BANK AND TO  THE  PAYOR
BANK  OR  OTHER  PAYOR  THAT  THE  INFORMATION  IS
CORRECTLY ENCODED. IF THE CUSTOMER OF A DEPOSITARY
BANK ENCODES, THAT BANK ALSO MAKES THE WARRANTY.
    (b) A PERSON WHO  UNDERTAKES TO RETAIN AN ITEM
PURSUANT    TO   AN   AGREEMENT   FOR   ELECTRONIC
PRESENTMENT WARRANTS TO ANY  SUBSEQUENT COLLECTING
BANK  AND  TO THE PAYOR BANK OR OTHER  PAYOR  THAT
RETENTION AND PRESENTMENT  OF THE ITEM COMPLY WITH
THE AGREEMENT.  IF A CUSTOMER OF A DEPOSITARY BANK
UNDERTAKES TO RETAIN AN ITEM, THAT BANK ALSO MAKES
THIS WARRANTY.
    (c) A PERSON TO WHOM WARRANTIES ARE MADE UNDER
THIS SECTION AND WHO  TOOK  THE ITEM IN GOOD FAITH
MAY  RECOVER  FROM  THE WARRANTOR AS  DAMAGES  FOR
BREACH OF WARRANTY  AN  AMOUNT  EQUAL  TO THE LOSS
SUFFERED  AS A RESULT OF THE BREACH, PLUS EXPENSES
AND LOSS OF INTEREST  INCURRED  AS A RESULT OF THE
BREACH.
    Sec.   88.  Section 42a-4-210 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)    Unless   otherwise   instructed,     a
collecting bank may  present  an  item not payable
by,  through or at a bank by sending to the  party
to accept or pay  a  written  notice that the bank
holds  the  item for acceptance or  payment.   The
notice must be sent in  time  to be received on or
before  the  day when presentment is due  and  the
bank must meet  any  requirement  of  the party to
accept or pay under section 42a-3-505 by the close
of the bank's next  banking  day after it knows of
the requirement.
    (2)  Where presentment is made by  notice  and
neither honor  nor  request  for compliance with a
requirement under section 42a-3-505 is received by
the close of business on the day after maturity or
in  the  case  of  demand items by  the  close  of
business on the third banking day after notice was
sent,   the presenting bank may treat the item  as
dishonored  and  charge  any  secondary  party  by
sending him notice of the facts.]
    (a) A COLLECTING BANK HAS A SECURITY  INTEREST
IN AN ITEM AND ANY  ACCOMPANYING  DOCUMENTS OR THE
PROCEEDS  OF  EITHER:   (1) IN  CASE  OF  AN  ITEM
DEPOSITED IN  AN  ACCOUNT,  TO THE EXTENT TO WHICH
CREDIT  GIVEN  FOR THE ITEM HAS BEEN WITHDRAWN  OR
APPLIED; (2) IN CASE OF  AN  ITEM FOR WHICH IT HAS
GIVEN CREDIT AVAILABLE FOR WITHDRAWAL AS OF RIGHT,
TO THE EXTENT OF THE  CREDIT GIVEN, WHETHER OR NOT
THE  CREDIT  IS DRAWN UPON OR THERE IS A RIGHT  OF
CHARGE-BACK; OR (3) IF  IT  MAKES AN ADVANCE ON OR
AGAINST THE ITEM.
    (b) IF CREDIT GIVEN FOR SEVERAL ITEMS RECEIVED
AT ONE TIME OR PURSUANT  TO  A SINGLE AGREEMENT IS
WITHDRAWN   OR  APPLIED  IN  PART,  THE   SECURITY
INTEREST   REMAINS   UPON   ALL   THE  ITEMS,  AND
ACCOMPANYING DOCUMENTS OR THE PROCEEDS OF  EITHER.
FOR THE PURPOSE OF  THIS  SECTION,   CREDITS FIRST
GIVEN ARE FIRST WITHDRAWN.
    (c)  RECEIPT BY A COLLECTING BANK  OF A  FINAL
SETTLEMENT FOR AN  ITEM  IS  A  REALIZATION ON ITS
SECURITY   INTEREST  IN  THE  ITEM,   ACCOMPANYING
DOCUMENTS, AND PROCEEDS.  SO LONG AS THE BANK DOES
NOT  RECEIVE FINAL SETTLEMENT FOR THE ITEM OR GIVE
UP  POSSESSION  OF   THE   ITEM   OR  ACCOMPANYING
DOCUMENTS  FOR PURPOSES OTHER THAN COLLECTION, THE
SECURITY INTEREST CONTINUES  TO THAT EXTENT AND IS
SUBJECT  TO  ARTICLE  9,  BUT:   (1)  NO  SECURITY
AGREEMENT  IS   NECESSARY  TO  MAKE  THE  SECURITY
INTEREST  ENFORCEABLE (SECTION 42a-9-203(1)  (a));
(2) NO FILING IS  REQUIRED TO PERFECT THE SECURITY
INTEREST;   AND  (3)  THE  SECURITY  INTEREST  HAS
PRIORITY  OVER   CONFLICTING   PERFECTED  SECURITY
INTERESTS  IN THE ITEM, ACCOMPANYING DOCUMENTS, OR
PROCEEDS.
    Sec.  89.   Section  42a-4-211  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1) A collecting bank  may take in settlement
of an item (a) a check of the remitting bank or of
another bank  on  any  bank  except  the remitting
bank;  or (b) a cashier's check or similar primary
obligation of a  remitting  bank which is a member
of or clears through a member of the same clearing
house or group  as  the  collecting  bank;  or (c)
appropriate  authority to charge an account of the
remitting  bank  or  of   another  bank  with  the
collecting  bank; or (d) if the item is drawn upon
or payable  by  a  person  other  than  a  bank, a
cashier's  check,  certified check or  other  bank
check or obligation.
    (2)  If  before  its   midnight  deadline  the
collecting  bank  properly dishonors a  remittance
check or  authorization  to  charge  on  itself or
presents  or forwards for collection a  remittance
instrument of or  on  another  bank  which is of a
kind  approved  by subsection (1) or has not  been
authorized by it,   the  collecting  bank  is  not
liable  to  prior  parties in  the  event  of  the
dishonor   of   such    check,     instrument   or
authorization.
    (3)  A  settlement for an item by means  of  a
remittance instrument or  authorization  to charge
is  or  becomes a final settlement as to both  the
person  making  and  the   person   receiving  the
settlement  (a)  if the remittance  instrument  or
authorization to charge  is  of a kind approved by
subsection  (1) or has not been authorized by  the
person receiving the settlement and in either case
the   person   receiving   the   settlement   acts
seasonably  before   its   midnight   deadline  in
presenting,   forwarding for collection or  paying
the instrument or  authorization,  at the time the
remittance instrument or authorization is  finally
paid by the payor by  which it is payable;  (b) if
the person receiving the settlement has authorized
remittance by a nonbank  check or obligation or by
a cashier's check or similar primary obligation of
or a check upon the  payor or other remitting bank
which  is not of a kind approved by subsection (1)
(b), at the time of the receipt of such remittance
check  or  obligation;  or (c) if  in a  case  not
covered  by  subparagraph  (a)  or  (b) the person
receiving   the  settlement  fails  to  seasonably
present, forward for  collection,  pay or return a
remittance  instrument  or authorization to it  to
charge before  its  midnight  deadline,   at  such
midnight deadline.]
    FOR  PURPOSES OF DETERMINING ITS STATUS  AS  A
HOLDER IN DUE COURSE,  A  BANK  HAS GIVEN VALUE TO
THE  EXTENT IT HAS A SECURITY INTEREST IN AN ITEM,
IF   THE   BANK   OTHERWISE   COMPLIES   WITH  THE
REQUIREMENTS   OF   SECTION  42a-3-302   ON   WHAT
CONSTITUTES A HOLDER IN DUE COURSE.
    Sec.  90.   Section  42a-4-212  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1) If a collecting bank has made provisional
settlement  with  its  customer for  an  item  and
itself fails by reason of  dishonor, suspension of
payments  by  a  bank or otherwise  to  receive  a
settlement for the item which is or becomes final,
the  bank may revoke the settlement given  by  it,
charge back the amount of any credit given for the
item  to  its customer's account or obtain  refund
from its  customer  whether  or  not it is able to
return  the  items if by its midnight deadline  or
within a longer  reasonable  time  after it learns
the   facts   it   returns  the  item   or   sends
notification of the facts. These rights to revoke,
charge  back  and obtain refund terminate  if  and
when a settlement  for  the  item  received by the
bank is or becomes final as provided in subsection
(3) of section 42a-4-211  and  subsections (2) and
(3) of section 42a-4-213.
    (2)  Within the time and manner prescribed  by
this section and section 42a-4-301 an intermediary
or  payor bank, as the case may be, may return  an
unpaid item directly to  the  depositary  bank and
may send for collection a draft on the  depositary
bank and obtain reimbursement.   In such case,  if
the   depositary  bank  has  received  provisional
settlement for the  item,   it  must reimburse the
bank drawing the draft and any provisional credits
for the item between banks shall become and remain
final.
    (3) A depositary bank which is also the  payor
may charge  back  the  amount  of  an  item to its
customer's account or obtain refund in  accordance
with section 42a-4-301 governing return of an item
received by a payor bank for credit on its books.
    (4)  The right to charge back is not  affected
by (a) prior use of the credit given for the item;
or  (b) failure by any bank to  exercise  ordinary
care with  respect  to  the  item  but any bank so
failing remains liable.
    (5)  A failure to charge back or claim  refund
does not affect other  rights  of the bank against
the customer or any other party.
    (6)  If  credit  is given in  dollars  as  the
equivalent of the value  of  an  item payable in a
foreign   currency  the  dollar  amount   of   any
charge-back or refund  shall  be calculated on the
basis  of  the buying sight rate for  the  foreign
currency prevailing  on  the  day  when the person
entitled  to the charge-back or refund learns that
it will not receive payment in ordinary course.]
    (a) UNLESS OTHERWISE  INSTRUCTED, A COLLECTING
BANK MAY PRESENT AN ITEM NOT PAYABLE BY,  THROUGH,
OR AT A BANK BY SENDING  TO THE PARTY TO ACCEPT OR
PAY  A WRITTEN NOTICE THAT THE BANK HOLDS THE ITEM
FOR ACCEPTANCE OR PAYMENT. THE NOTICE MUST BE SENT
IN  TIME TO BE RECEIVED ON OR BEFORE THE DAY  WHEN
PRESENTMENT IS DUE  AND  THE  BANK  MUST  MEET ANY
REQUIREMENT  OF THE PARTY TO ACCEPT OR  PAY  UNDER
SECTION 42a-3-501 BY THE  CLOSE OF THE BANK'S NEXT
BANKING DAY AFTER IT KNOWS OF THE REQUIREMENT.
    (b)  IF  PRESENTMENT  IS MADE  BY  NOTICE  AND
PAYMENT, ACCEPTANCE,   OR  REQUEST  FOR COMPLIANCE
WITH A REQUIREMENT UNDER SECTION 42a-3-501 IS  NOT
RECEIVED BY THE CLOSE OF BUSINESS ON THE DAY AFTER
MATURITY  OR,  IN THE CASE OF DEMAND ITEMS, BY THE
CLOSE OF BUSINESS ON THE  THIRD  BANKING DAY AFTER
NOTICE WAS SENT, THE PRESENTING BANK MAY TREAT THE
ITEM  AS  DISHONORED  AND  CHARGE  ANY  DRAWER  OR
INDORSER BY SENDING IT NOTICE OF THE FACTS.
    Sec.   91.  Section 42a-4-213 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  An item is finally paid by a payor  bank
when the bank  has  done  any  of  the  following,
whichever  happens  first:  (a) Paid the  item  in
cash;   or  (b)  settled   for  the  item  without
reserving  a  right to revoke the  settlement  and
without having such right under statute,  clearing
house  rule  or agreement;  or (c)  completed  the
process of  posting  the  item  to  the  indicated
account of the drawer, maker or other person to be
charged therewith;   or  (d)  made  a  provisional
settlement  for the item and failed to revoke  the
settlement in the  time  and  manner  permitted by
statute,  clearing house rule or agreement. Upon a
final payment under  subparagraph  (b), (c) or (d)
the payor bank shall be accountable for the amount
of the item.
    (2)  If  provisional  settlement  for  an item
between  the  presenting and payor banks  is  made
through a clearing house  or  by debits or credits
in  an account between them,  then to  the  extent
that provisional  debits  or  credits for the item
are entered in accounts between the presenting and
payor  banks  or   between   the   presenting  and
successive prior collecting banks seriatim,   they
become final upon final payment of the item by the
payor bank.
    (3) If a collecting bank receives a settlement
for an item which is or becomes final, as provided
in   subsection  (3)  of  section   42a-4-211   or
subsection (2)  of  this  section,   the  bank  is
accountable to its customer for the amount of  the
item and any provisional credit given for the item
in an account with its customer becomes final.
    (4) Subject to any right of the bank to  apply
the credit  to  an  obligation  of  the  customer,
credit  given by a bank for an item in an  account
with its customer becomes available for withdrawal
as  of  right (a) in any case where the  bank  has
received a provisional  settlement  for  the item,
when  such settlement becomes final and  the  bank
has  had  a  reasonable  time  to  learn  that the
settlement  is  final;  (b) in any case where  the
bank is both a  depositary  bank  and a payor bank
and  the item is finally paid, at the  opening  of
the bank's second banking day following receipt of
the item.
    (5) A deposit of money in a bank is final when
made but, subject  to  any  right  of  the bank to
apply   the  deposit  to  an  obligation  of   the
customer,   the  deposit   becomes  available  for
withdrawal  as  of  right at the  opening  of  the
bank's next banking day  following  receipt of the
deposit.]
    (a) WITH RESPECT TO SETTLEMENT BY A BANK,  THE
MEDIUM AND TIME OF SETTLEMENT MAY BE PRESCRIBED BY
FEDERAL    RESERVE   REGULATIONS   OR   CIRCULARS,
CLEARING-HOUSE RULES, AND  THE LIKE, OR AGREEMENT.
IN  THE  ABSENCE OF SUCH  PRESCRIPTION:   (1)  THE
MEDIUM  OF  SETTLEMENT  IS  CASH  OR  CREDIT TO AN
ACCOUNT IN A FEDERAL RESERVE BANK OF OR  SPECIFIED
BY THE PERSON TO RECEIVE  SETTLEMENT;  AND (2) THE
TIME OF SETTLEMENT, IS: (i) WITH RESPECT TO TENDER
OF SETTLEMENT BY  CASH,   A  CASHIER'S  CHECK,  OR
TELLER'S  CHECK, WHEN THE CASH OR CHECK IS SENT OR
DELIVERED;   (ii)  WITH   RESPECT   TO  TENDER  OF
SETTLEMENT  BY CREDIT IN AN ACCOUNT  IN A  FEDERAL
RESERVE BANK, WHEN THE  CREDIT IS MADE; (iii) WITH
RESPECT  TO  TENDER OF SETTLEMENT BY A  CREDIT  OR
DEBIT TO AN ACCOUNT IN A  BANK, WHEN THE CREDIT OR
DEBIT  IS  MADE  OR,   IN THE CASE  OF  TENDER  OF
SETTLEMENT BY AUTHORITY TO CHARGE AN ACCOUNT, WHEN
THE  AUTHORITY IS SENT OR DELIVERED; OR (iv)  WITH
RESPECT  TO  TENDER  OF   SETTLEMENT  BY  A  FUNDS
TRANSFER, WHEN PAYMENT IS MADE PURSUANT TO SECTION
42a-4A-406(a) TO THE PERSON RECEIVING SETTLEMENT.
    (b) IF THE TENDER  OF  SETTLEMENT  IS NOT BY A
MEDIUM AUTHORIZED BY SUBSECTION (a) OR THE TIME OF
SETTLEMENT  IS  NOT  FIXED  BY  SUBSECTION (a), NO
SETTLEMENT  OCCURS UNTIL THE TENDER OF  SETTLEMENT
IS ACCEPTED BY THE PERSON RECEIVING SETTLEMENT.
    (c)  IF  SETTLEMENT  FOR  AN  ITEM  IS MADE BY
CASHIER'S  CHECK OR TELLER'S CHECK AND THE  PERSON
RECEIVING   SETTLEMENT,    BEFORE   ITS   MIDNIGHT
DEADLINE:  (1) PRESENTS OR FORWARDS THE CHECK  FOR
COLLECTION,  SETTLEMENT IS FINAL WHEN THE CHECK IS
FINALLY  PAID; OR (2) FAILS TO PRESENT OR  FORWARD
THE CHECK FOR  COLLECTION,  SETTLEMENT IS FINAL AT
THE  MIDNIGHT  DEADLINE  OF THE  PERSON  RECEIVING
SETTLEMENT.
    (d)  IF  SETTLEMENT  FOR  AN  ITEM  IS MADE BY
GIVING AUTHORITY TO CHARGE THE ACCOUNT OF THE BANK
GIVING   SETTLEMENT   IN    THE   BANK   RECEIVING
SETTLEMENT, SETTLEMENT IS FINAL WHEN THE CHARGE IS
MADE BY THE BANK RECEIVING SETTLEMENT IF THERE ARE
FUNDS  AVAILABLE IN THE ACCOUNT FOR THE AMOUNT  OF
THE ITEM.
    Sec.  92.   Section  42a-4-214  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [(1) Any item in or coming into the possession
of  a  payor  or collecting  bank  which  suspends
payment and which item  is  not finally paid shall
be  returned by the receiver, trustee or agent  in
charge of the closed  bank  to the presenting bank
or the closed bank's customer.
    (2)  If a payor bank finally pays an item  and
suspends payments without  making a settlement for
the item with its customer or the presenting  bank
which settlement is or becomes final, the owner of
the  item has a preferred claim against the  payor
bank.
    (3) If a payor bank gives or a collecting bank
gives or receives a provisional settlement for  an
item  and   thereafter   suspends   payments,  the
suspension  does not prevent or interfere with the
settlement becoming final  if such finality occurs
automatically  upon the lapse of certain  time  or
the happening  of  certain  events  as provided in
subsection   (3)   of   section   42a-4-211    and
subsections  (1)  (d),   (2)  and  (3)  of section
42a-4-213.
    (4)   If  a  collecting  bank  receives   from
subsequent parties  settlement  for  an item which
settlement  is  or  becomes  final  and   suspends
payments without making  a settlement for the item
with  its customer which is or becomes final,  the
owner of the item has  a  preferred  claim against
such collecting bank.]
    (a) IF A COLLECTING BANK HAS MADE  PROVISIONAL
SETTLEMENT WITH ITS CUSTOMER FOR AN ITEM AND FAILS
BY REASON OF DISHONOR, SUSPENSION OF PAYMENTS BY A
BANK, OR OTHERWISE TO RECEIVE A SETTLEMENT FOR THE
ITEM  WHICH  IS  OR BECOMES FINAL,  THE  BANK  MAY
REVOKE THE SETTLEMENT GIVEN BY IT, CHARGE BACK THE
AMOUNT  OF  ANY CREDIT GIVEN FOR THE ITEM  TO  ITS
CUSTOMER'S ACCOUNT,   OR  OBTAIN  REFUND  FROM ITS
CUSTOMER,  WHETHER OR NOT IT IS ABLE TO RETURN THE
ITEM, IF  BY  ITS  MIDNIGHT  DEADLINE  OR WITHIN A
LONGER  REASONABLE TIME AFTER IT LEARNS THE  FACTS
IT RETURNS THE ITEM OR  SENDS  NOTIFICATION OF THE
FACTS.  IF THE RETURN OR NOTICE IS DELAYED  BEYOND
THE  BANK'S   MIDNIGHT   DEADLINE   OR   A  LONGER
REASONABLE  TIME  AFTER IT LEARNS THE  FACTS,  THE
BANK MAY REVOKE THE  SETTLEMENT,   CHARGE BACK THE
CREDIT, OR OBTAIN REFUND FROM ITS CUSTOMER, BUT IT
IS LIABLE FOR ANY LOSS  RESULTING  FROM THE DELAY.
THESE  RIGHTS  TO REVOKE, CHARGE BACK, AND  OBTAIN
REFUND TERMINATE IF AND WHEN  A SETTLEMENT FOR THE
ITEM RECEIVED BY THE BANK IS OR BECOMES FINAL.
    (b) A COLLECTING BANK RETURNS AN ITEM WHEN  IT
IS SENT OR DELIVERED  TO  THE  BANK'S  CUSTOMER OR
TRANSFEROR OR PURSUANT TO ITS INSTRUCTIONS.
    (c)  A DEPOSITARY BANK THAT IS ALSO THE  PAYOR
MAY CHARGE  BACK  THE  AMOUNT  OF  AN  ITEM TO ITS
CUSTOMER'S  ACCOUNT OR OBTAIN REFUND IN ACCORDANCE
WITH  THE  SECTION  GOVERNING  RETURN  OF  AN ITEM
RECEIVED  BY A PAYOR BANK FOR CREDIT ON ITS  BOOKS
(SECTION 42a-4-301).
    (d) THE RIGHT TO  CHARGE  BACK IS NOT AFFECTED
BY:  (1)  PREVIOUS USE OF A CREDIT GIVEN  FOR  THE
ITEM;  OR (2)  FAILURE  BY  ANY  BANK  TO EXERCISE
ORDINARY CARE WITH RESPECT TO THE ITEM, BUT A BANK
SO FAILING REMAINS LIABLE.
    (e) A FAILURE TO  CHARGE  BACK OR CLAIM REFUND
DOES  NOT AFFECT OTHER RIGHTS OF THE BANK  AGAINST
THE CUSTOMER OR ANY OTHER PARTY.
    (f) IF  CREDIT  IS  GIVEN  IN  DOLLARS  AS THE
EQUIVALENT  OF  THE VALUE OF AN  ITEM  PAYABLE  IN
FOREIGN  MONEY,    THE   DOLLAR   AMOUNT   OF  ANY
CHARGE-BACK  OR  REFUND MUST BE CALCULATED ON  THE
BASIS  OF  THE  BANK-OFFERED  SPOT  RATE  FOR  THE
FOREIGN  MONEY  PREVAILING  ON THE  DAY  WHEN  THE
PERSON  ENTITLED  TO  THE  CHARGE-BACK  OR  REFUND
LEARNS  THAT  IT  WILL  NOT  RECEIVE  PAYMENT   IN
ORDINARY COURSE.
    Sec.  93. (NEW) (a) An item is finally paid by
a  payor bank when the bank has first done any  of
the following:   (1)  Paid  the  item in cash; (2)
settled  for  the item without having a  right  to
revoke    the     settlement     under    statute,
clearing-house  rule, or agreement; or (3) made  a
provisional settlement  for the item and failed to
revoke  the  settlement  in the  time  and  manner
permitted by  statute,   clearing-house  rule,  or
agreement.
    (b) If provisional settlement for an item does
not become final, the item is not finally paid.
    (c)  If  provisional  settlement  for  an item
between  the  presenting and payor banks  is  made
through a clearing-house  or  by debits or credits
in  an account between them,  then to  the  extent
that provisional  debits  or  credits for the item
are entered in accounts between the presenting and
payor  banks  or   between   the   presenting  and
successive prior collecting banks seriatim,   they
become final upon  final  payment  of the items by
the payor bank.
    (d) If a collecting bank receives a settlement
for an item which is or becomes final, the bank is
accountable to its customer for the amount of  the
item and any provisional credit given for the item
in an account with its customer becomes final.
    (e)  Subject to (i) applicable law  stating  a
time for availability of  funds and (ii) any right
of  the bank to apply the credit to an  obligation
of the customer,  credit  given  by  a bank for an
item in a customer's account becomes available for
withdrawal  as  of  right:   (1)  If  the bank has
received  a  provisional settlement for the  item,
when the settlement becomes final and the bank has
had  a  reasonable time to receive return  of  the
item and the item  has  not  been  received within
that  time; (2) if the bank is both the depositary
bank and the payor bank,  and  the item is finally
paid,  at the opening of the bank's second banking
day following receipt of the item.
    (f) Subject to  applicable  law stating a time
for availability of funds and any right of a  bank
to  apply  a  deposit  to  an  obligation  of  the
depositor,  a  deposit of money becomes  available
for withdrawal as of  right  at the opening of the
bank's  next  banking  day after  receipt  of  the
deposit.
    Sec.  94.  (NEW) (a) If an item is in or comes
into the possession of a payor or collecting  bank
that suspends  payment  and  the item has not been
finally  paid,  the item must be returned  by  the
receiver,  trustee,   or  agent  in  charge of the
closed  bank to the presenting bank or the  closed
bank's customer.
    (b) If a payor bank  finally  pays an item and
suspends payments without making a settlement  for
the item with its  customer or the presenting bank
which settlement is or becomes final, the owner of
the item has a preferred  claim  against the payor
bank.
    (c) If a payor bank gives or a collecting bank
gives or receives a provisional  settlement for an
item   and   thereafter  suspends  payments,   the
suspension does not prevent  or interfere with the
settlement's becoming final if the finality occurs
automatically upon the  lapse  of  certain time or
the happening of certain events.
    (d)   If  a  collecting  bank  receives   from
subsequent parties settlement  for an item,  which
settlement  is  or  becomes  final  and  the  bank
suspends payments  without making a settlement for
the  item with its customer which settlement is or
becomes  final,   the  owner  of  the  item  has a
preferred claim against the collecting bank.
    Sec.   95.  Section 42a-4-301 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  Where  an authorized  settlement  for  a
demand  item,   other  than  a  documentary draft,
received  by  a  payor  bank  otherwise  than  for
immediate payment over  the  counter has been made
before  midnight of the banking day of receipt the
payor bank may revoke  the  settlement and recover
any payment if before it has made final payment as
provided in  subsection  (1)  of section 42a-4-213
and  before  its midnight deadline it (a)  returns
the item; or (b) sends written  notice of dishonor
or  nonpayment if the item is held for protest  or
is otherwise unavailable for return.
    (2) If a demand  item  is  received by a payor
bank  for  credit on its books it may return  such
item or send notice of dishonor and may revoke any
credit   given  or  recover  the  amount   thereof
withdrawn by its  customer,  if it acts within the
time  limit  and  in the manner specified  in  the
preceding subsection.
    (3) Unless  previous  notice  of  dishonor has
been  sent an item is dishonored at the time  when
for purposes of dishonor it  is returned or notice
sent in accordance with this section.
    (4)  An  item is returned: (a) As to  an  item
received through  a  clearing  house,   when it is
delivered  to  the presenting or  last  collecting
bank  or  to  the  clearing  house  or  is sent or
delivered  in accordance with its rules; or (b) in
all other cases, when it  is  sent or delivered to
the  bank's customer or transferor or pursuant  to
his instructions.]
    (a) IF A PAYOR BANK  SETTLES FOR A DEMAND ITEM
OTHER THAN A DOCUMENTARY DRAFT PRESENTED OTHERWISE
THAN FOR IMMEDIATE PAYMENT OVER THE COUNTER BEFORE
MIDNIGHT  OF THE BANKING DAY OF RECEIPT, THE PAYOR
BANK MAY REVOKE  THE  SETTLEMENT  AND  RECOVER THE
SETTLEMENT  IF,  BEFORE IT HAS MADE FINAL  PAYMENT
AND BEFORE ITS MIDNIGHT  DEADLINE,  IT (1) RETURNS
THE  ITEM; OR (2) SENDS WRITTEN NOTICE OF DISHONOR
OR NONPAYMENT  IF  THE  ITEM  IS  UNAVAILABLE  FOR
RETURN.
    (b)  IF A DEMAND ITEM IS RECEIVED  BY A  PAYOR
BANK FOR CREDIT ON  ITS  BOOKS,  IT MAY RETURN THE
ITEM OR SEND NOTICE OF DISHONOR AND MAY REVOKE ANY
CREDIT  GIVEN  OR   RECOVER   THE  AMOUNT  THEREOF
WITHDRAWN  BY ITS CUSTOMER, IF IT ACTS WITHIN  THE
TIME  LIMIT  AND  IN   THE   MANNER  SPECIFIED  IN
SUBSECTION (a).
    (c)  UNLESS  PREVIOUS NOTICE OF  DISHONOR  HAS
BEEN SENT, AN ITEM IS DISHONORED  AT THE TIME WHEN
FOR PURPOSES OF DISHONOR IT IS RETURNED OR  NOTICE
SENT IN ACCORDANCE WITH THIS SECTION.
    (d) AN ITEM  IS  RETURNED:  (1)  AS TO AN ITEM
PRESENTED  THROUGH A CLEARING-HOUSE,  WHEN  IT  IS
DELIVERED TO  THE  PRESENTING  OR  LAST COLLECTING
BANK  OR  TO  THE CLEARING-HOUSE  OR  IS  SENT  OR
DELIVERED IN ACCORDANCE WITH CLEARING-HOUSE RULES;
OR  (2)  IN ALL OTHER CASES,  WHEN IT IS  SENT  OR
DELIVERED TO THE BANK'S  CUSTOMER OR TRANSFEROR OR
PURSUANT TO INSTRUCTIONS.
    Sec.   96.  Section 42a-4-302 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [In  the  absence of a valid defense  such  as
breach  of  a  presentment  warranty,   settlement
effected  or the like, if an item is presented  on
and  received  by  a   payor   bank  the  bank  is
accountable  for  the amount of (a) a demand  item
other than a  documentary  draft  whether properly
payable  or not if the bank, in any case where  it
is not also the depositary  bank, retains the item
beyond  midnight  of the banking  day  of  receipt
without settling for it  or, regardless of whether
it  is  also the depositary bank, does not pay  or
return the item or send  notice  of dishonor until
after  its  midnight deadline;  or (b)  any  other
properly  payable  item  unless  within  the  time
allowed for acceptance or payment of that item the
bank either accepts or pays the item or returns it
and accompanying documents.]
    (a) IF AN ITEM IS PRESENTED TO AND RECEIVED BY
A PAYOR BANK, THE  BANK  IS  ACCOUNTABLE  FOR  THE
AMOUNT  OF:   (1)  A DEMAND ITEM,   OTHER  THAN  A
DOCUMENTARY DRAFT,   WHETHER  PROPERLY  PAYABLE OR
NOT,  IF THE BANK, IN ANY CASE IN WHICH IT IS  NOT
ALSO THE DEPOSITARY  BANK, RETAINS THE ITEM BEYOND
MIDNIGHT  OF  THE BANKING DAY OF  RECEIPT  WITHOUT
SETTLING FOR IT OR,  WHETHER OR NOT IT IS ALSO THE
DEPOSITARY  BANK,  DOES NOT PAY OR RETURN THE ITEM
OR  SEND  NOTICE  OF   DISHONOR  UNTIL  AFTER  ITS
MIDNIGHT  DEADLINE;   OR  (2) ANY  OTHER  PROPERLY
PAYABLE ITEM UNLESS,  WITHIN  THE TIME ALLOWED FOR
ACCEPTANCE  OR  PAYMENT  OF THAT ITEM,   THE  BANK
EITHER ACCEPTS OR PAYS THE  ITEM OR RETURNS IT AND
ACCOMPANYING DOCUMENTS.
    (b)  THE LIABILITY OF A PAYOR BANK TO  PAY  AN
ITEM  PURSUANT  TO  SUBSECTION  (a)  IS SUBJECT TO
DEFENSES BASED ON BREACH OF A PRESENTMENT WARRANTY
(SECTION  42a-4-208)  OR  PROOF  THAT  THE  PERSON
SEEKING ENFORCEMENT OF THE LIABILITY PRESENTED  OR
TRANSFERRED THE ITEM FOR THE PURPOSE OF DEFRAUDING
THE PAYOR BANK.
    Sec.   97.  Section 42a-4-303 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  Any  knowledge,   notice  or  stop-order
received by, legal  process served upon or set-off
exercised  by  a  payor  bank,   whether  or   not
effective under other  rules  of law to terminate,
suspend or modify the bank's right or duty to  pay
an item or to  charge  its  customer's account for
the  item, comes too late to so terminate, suspend
or modify such right  or  duty  if  the knowledge,
notice, stop-order or legal process is received or
served and a reasonable  time  for the bank to act
thereon expires or the set-off is exercised  after
the bank has  done  any  of  the  following:   (a)
Accepted or certified the item; (b) paid the  item
in  cash;   (c)  settled   for  the  item  without
reserving  a  right to revoke the  settlement  and
without having such right under statute,  clearing
house rule or agreement; (d) completed the process
of posting the item  to  the  indicated account of
the  drawer,  maker or other person to be  charged
therewith   or    otherwise   has   evidenced   by
examination  of  such  indicated  account  and  by
action its decision to pay the item; or (e) become
accountable  for  the  amount of  the  item  under
subsection  (1)  (d)  of   section  42a-4-213  and
section  42a-4-302  dealing with the payor  bank's
responsibility for late return of items.
    (2) Subject to  the  provisions  of subsection
(1)  items  may be accepted,  paid,  certified  or
charged to the indicated  account  of its customer
in any order convenient to the bank.]
    (a)  ANY KNOWLEDGE,  NOTICE,  OR  STOP-PAYMENT
ORDER RECEIVED BY, LEGAL PROCESS  SERVED UPON,  OR
SET-OFF  EXERCISED BY A PAYOR BANK COMES TOO  LATE
TO TERMINATE, SUSPEND, OR  MODIFY THE BANK'S RIGHT
OR DUTY TO PAY AN ITEM OR TO CHARGE ITS CUSTOMER'S
ACCOUNT FOR THE ITEM IF  THE  KNOWLEDGE,   NOTICE,
STOP-PAYMENT ORDER,  OR LEGAL PROCESS IS  RECEIVED
OR SERVED AND  A  REASONABLE  TIME FOR THE BANK TO
ACT  THEREON  EXPIRES OR THE SET-OFF IS  EXERCISED
AFTER THE EARLIEST OF THE  FOLLOWING: (1) THE BANK
ACCEPTS  OR CERTIFIES THE ITEM; (2) THE BANK  PAYS
THE ITEM IN CASH;  (3)  THE  BANK  SETTLES FOR THE
ITEM   WITHOUT  HAVING  A  RIGHT  TO  REVOKE   THE
SETTLEMENT UNDER STATUTE, CLEARING-HOUSE RULE,  OR
AGREEMENT;   (4) THE BANK BECOMES ACCOUNTABLE  FOR
THE AMOUNT OF THE  ITEM  UNDER  SECTION  42a-4-302
DEALING  WITH THE PAYOR BANK'S RESPONSIBILITY  FOR
LATE RETURN  OF  ITEMS;   OR  (5)  WITH RESPECT TO
CHECKS,   A CUT-OFF HOUR NO EARLIER THAN ONE  HOUR
AFTER THE OPENING  OF  THE  NEXT BANKING DAY AFTER
THE  BANKING  DAY ON WHICH THE BANK  RECEIVED  THE
CHECK AND NO LATER  THAN  THE  CLOSE  OF THAT NEXT
BANKING  DAY OR, IF NO CUT-OFF HOUR IS FIXED,  THE
CLOSE OF THE NEXT  BANKING  DAY  AFTER THE BANKING
DAY ON WHICH THE BANK RECEIVED THE CHECK.
    (b)  SUBJECT TO SUBSECTION (a), ITEMS  MAY  BE
ACCEPTED,   PAID,   CERTIFIED,   OR CHARGED TO THE
INDICATED ACCOUNT OF ITS CUSTOMER IN ANY ORDER.
    Sec.   98.  Section 42a-4-401 of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)  As  against its customer,   a  bank  may
charge  against  his  account  any  item  which is
otherwise properly payable from that account  even
though the charge creates an overdraft.
    (2) A bank which in  good  faith makes payment
to  a holder may charge the indicated  account  of
its customer according  to  (a) the original tenor
of  his  altered item;  or (b) the  tenor  of  his
completed item,   even  though  the bank knows the
item has been completed unless the bank has notice
that the completion was improper.]
    (a) A BANK MAY CHARGE AGAINST THE ACCOUNT OF A
CUSTOMER  AN  ITEM THAT IS PROPERLY  PAYABLE  FROM
THAT ACCOUNT  EVEN  THOUGH  THE  CHARGE CREATES AN
OVERDRAFT.   AN ITEM IS PROPERLY PAYABLE IF IT  IS
AUTHORIZED BY THE  CUSTOMER  AND  IS IN ACCORDANCE
WITH ANY AGREEMENT BETWEEN THE CUSTOMER AND BANK.
    (b) A CUSTOMER IS NOT LIABLE FOR THE AMOUNT OF
AN OVERDRAFT IF THE  CUSTOMER  NEITHER  SIGNED THE
ITEM NOT BENEFITTED FROM THE PROCEEDS OF THE ITEM.
    (c) A BANK MAY CHARGE AGAINST THE ACCOUNT OF A
CUSTOMER  A  CHECK  THAT   IS  OTHERWISE  PROPERLY
PAYABLE  FROM THE ACCOUNT, EVEN THOUGH PAYMENT WAS
MADE BEFORE THE DATE  OF  THE  CHECK,   UNLESS THE
CUSTOMER  HAS  GIVEN  NOTICE TO THE  BANK  OF  THE
POSTDATING  DESCRIBING  THE  CHECK WITH REASONABLE
CERTAINTY.  THE NOTICE IS EFFECTIVE FOR THE PERIOD
STATED IN  SECTION  42a-4-403(b)  FOR STOP-PAYMENT
ORDERS,   AND MUST BE RECEIVED AT SUCH TIME AND IN
SUCH MANNER AS  TO  AFFORD  THE  BANK A REASONABLE
OPPORTUNITY TO ACT ON IT BEFORE THE BANK TAKES ANY
ACTION WITH  RESPECT  TO  THE  CHECK  DESCRIBED IN
SECTION  42a-4-303.  IF A BANK CHARGES AGAINST THE
ACCOUNT OF A  CUSTOMER  A  CHECK  BEFORE  THE DATE
STATED  IN THE NOTICE OF POSTDATING, THE  BANK  IS
LIABLE FOR DAMAGES FOR THE LOSS RESULTING FROM ITS
ACT.  THE LOSS MAY INCLUDE DAMAGES FOR DISHONOR OF
SUBSEQUENT ITEMS UNDER SECTION 42a-4-402.
    (d) A BANK THAT IN GOOD FAITH MAKES PAYMENT TO
A  HOLDER MAY CHARGE THE INDICATED ACCOUNT OF  ITS
CUSTOMER ACCORDING TO:  (1)  THE ORIGINAL TERMS OF
THE  ALTERED  ITEM;   OR  (2)  THE  TERMS  OF  THE
COMPLETED ITEM,   EVEN  THOUGH  THE BANK KNOWS THE
ITEM HAS BEEN COMPLETED UNLESS THE BANK HAS NOTICE
THAT THE COMPLETION WAS IMPROPER.
    Sec.  99.   Section  42a-4-402  of the general
statutes   is   repealed  and  the  following   is
substituted in lieu thereof:
    [A payor bank  is  liable  to its customer for
damages   proximately  caused  by   the   wrongful
dishonor of an  item.   When  the  dishonor occurs
through  mistake  liability is limited  to  actual
damages proved.   If  so  proximately  caused  and
proved  damages may include damages for an  arrest
or  prosecution   of   the   customer   or   other
consequential  damages.  Whether any consequential
damages are  proximately  caused  by  the wrongful
dishonor is a question of fact to be determined in
each case.]
    (a)  EXCEPT  AS  OTHERWISE  PROVIDED  IN  THIS
ARTICLE, A PAYOR BANK WRONGFULLY DISHONORS AN ITEM
IF IT DISHONORS AN ITEM THAT  IS PROPERLY PAYABLE,
BUT A BANK MAY DISHONOR AN ITEM THAT WOULD  CREATE
AN OVERDRAFT  UNLESS  IT  HAS  AGREED  TO  PAY THE
OVERDRAFT.
    (b) A PAYOR BANK IS LIABLE TO ITS CUSTOMER FOR
DAMAGES  PROXIMATELY   CAUSED   BY   THE  WRONGFUL
DISHONOR  OF  AN ITEM.  LIABILITY  IS  LIMITED  TO
ACTUAL DAMAGES PROVED  AND MAY INCLUDE DAMAGES FOR
AN  ARREST OR PROSECUTION OF THE CUSTOMER OR OTHER
CONSEQUENTIAL DAMAGES.   WHETHER ANY CONSEQUENTIAL
DAMAGES  ARE  PROXIMATELY CAUSED BY  THE  WRONGFUL
DISHONOR IS A QUESTION OF FACT TO BE DETERMINED IN
EACH CASE.
    (c)  A  PAYOR  BANK'S  DETERMINATION  OF   THE
CUSTOMER'S ACCOUNT  BALANCE ON WHICH A DECISION TO
DISHONOR  FOR INSUFFICIENCY OF AVAILABLE FUNDS  IS
BASED MAY BE MADE AT ANY TIME BETWEEN THE TIME THE
ITEM  IS  RECEIVED BY THE PAYOR BANK AND THE  TIME
THAT THE PAYOR  BANK  RETURNS  THE  ITEM  OR GIVES
NOTICE  IN  LIEU OF RETURN, AND NO MORE  THAN  ONE
DETERMINATION NEED BE MADE. IF, AT THE ELECTION OF
THE PAYOR BANK, A SUBSEQUENT BALANCE DETERMINATION
IS MADE FOR THE PURPOSE OF REEVALUATING THE BANK'S
DECISION TO DISHONOR THE ITEM, THE ACCOUNT BALANCE
AT  THAT  TIME  IS   DETERMINATIVE  OF  WHETHER  A
DISHONOR  FOR INSUFFICIENCY OF AVAILABLE FUNDS  IS
WRONGFUL.
    Sec.  100.  Section  42a-4-403  of the general
statutes   is  repealed  and  the   following   is
substituted in lieu thereof:
    [(1) A customer may by  order to his bank stop
payment  of  any item payable for his account  but
the order must  be  received  at  such time and in
such  manner  as to afford the  bank a  reasonable
opportunity to act  on  it  prior to any action by
the  bank  with respect to the item  described  in
section 42a-4-303.
    (2) An oral order  is  binding  upon  the bank
only  for fourteen calendar days unless  confirmed
in writing within that period.  A written order is
effective  for only six months unless  renewed  in
writing.
    (3) The burden  of  establishing  the fact and
amount  of  loss resulting from the payment of  an
item contrary to a  binding  stop payment order is
on the customer.]
    (a)  A  CUSTOMER OR ANY PERSON  AUTHORIZED  TO
DRAW ON THE ACCOUNT  IF  THERE  IS  MORE  THAN ONE
PERSON  MAY STOP PAYMENT OF ANY ITEM DRAWN ON  THE
CUSTOMER'S ACCOUNT  OR  CLOSE  THE  ACCOUNT  BY AN
ORDER  TO THE BANK DESCRIBING THE ITEM OR  ACCOUNT
WITH REASONABLE  CERTAINTY  RECEIVED AT A TIME AND
IN  A  MANNER THAT AFFORDS THE  BANK A  REASONABLE
OPPORTUNITY TO ACT ON IT  BEFORE ANY ACTION BY THE
BANK WITH RESPECT TO THE ITEM DESCRIBED IN SECTION
42a-4-303.  IF  THE  SIGNATURE  OF  MORE  THAN ONE
PERSON  IS REQUIRED TO DRAW ON AN ACCOUNT, ANY  OF
THESE  PERSONS  MAY  STOP  PAYMENT  OR  CLOSE  THE
ACCOUNT.
    (b) A STOP-PAYMENT ORDER IS EFFECTIVE FOR  SIX
MONTHS, BUT IT LAPSES AFTER FOURTEEN CALENDAR DAYS
IF  THE  ORIGINAL  ORDER  WAS  ORAL  AND  WAS  NOT
CONFIRMED  IN  WRITING  WITHIN   THAT  PERIOD.   A
STOP-PAYMENT  ORDER MAY BE RENEWED FOR  ADDITIONAL
SIX-MONTH PERIODS BY A  WRITING  GIVEN TO THE BANK
WITHIN  A  PERIOD  DURING WHICH  THE  STOP-PAYMENT
ORDER IS EFFECTIVE.
    (c) THE BURDEN  OF  ESTABLISHING  THE FACT AND
AMOUNT  OF  LOSS RESULTING FROM THE PAYMENT OF  AN
ITEM CONTRARY TO A STOP-PAYMENT  ORDER OR ORDER TO
CLOSE AN ACCOUNT IS ON THE CUSTOMER. THE LOSS FROM
PAYMENT OF AN  ITEM  CONTRARY  TO  A  STOP-PAYMENT
ORDER   MAY  INCLUDE  DAMAGES  FOR   DISHONOR   OF
SUBSEQUENT ITEMS UNDER SECTION 42a-4-402.
    Sec.  101.  Section  42a-4-405  of the general
statutes   is  repealed  and  the   following   is
substituted in lieu thereof:
    [(1) A payor or collecting bank's authority to
accept,  pay or collect an item or to account  for
proceeds of its collection  if otherwise effective
is  not rendered ineffective by incompetence of  a
customer of either bank  existing  at the time the
item  is issued or its collection is undertaken if
the bank does  not  know  of  an  adjudication  of
incompetence.  Neither death nor incompetence of a
customer revokes  such  authority  to accept, pay,
collect  or  account until the bank knows  of  the
fact  of  death   or   of   an   adjudication   of
incompetence and has reasonable opportunity to act
on it.
    (2) Even  with  knowledge  a  bank may for ten
days after the date of death pay or certify checks
drawn on or prior to  that  date unless ordered to
stop  payment by a person claiming an interest  in
the account.]
    (a) A PAYOR OR  COLLECTING BANK'S AUTHORITY TO
ACCEPT,  PAY, OR COLLECT AN ITEM OR TO ACCOUNT FOR
PROCEEDS  OF   ITS   COLLECTION,    IF   OTHERWISE
EFFECTIVE,    IS   NOT  RENDERED  INEFFECTIVE   BY
INCOMPETENCE OF A CUSTOMER OF EITHER BANK EXISTING
AT  THE TIME THE ITEM IS ISSUED OR ITS  COLLECTION
IS UNDERTAKEN IF  THE  BANK  DOES  NOT  KNOW OF AN
ADJUDICATION  OF INCOMPETENCE.  NEITHER DEATH  NOR
INCOMPETENCE OF A  CUSTOMER  REVOKES THE AUTHORITY
TO ACCEPT, PAY, COLLECT, OR ACCOUNT UNTIL THE BANK
KNOWS OF THE FACT OF  DEATH  OR OF AN ADJUDICATION
OF INCOMPETENCE AND HAS REASONABLE OPPORTUNITY  TO
ACT ON IT.
    (b) EVEN  WITH  KNOWLEDGE,  A BANK MAY FOR TEN
DAYS AFTER THE DATE OF DEATH PAY OR CERTIFY CHECKS
DRAWN ON OR BEFORE  THAT  DATE  UNLESS  ORDERED TO
STOP  PAYMENT BY A PERSON CLAIMING AN INTEREST  IN
THE ACCOUNT.
    Sec.  102.  Section  42a-4-406  of the general
statutes   is  repealed  and  the   following   is
substituted in lieu thereof:
    [(1) When  a  bank  sends  to  its  customer a
statement of account accompanied by items paid  in
good faith  in  support  of  the  debit entries or
holds  the  statement  and  items  pursuant  to  a
request  or   instructions   of  its  customer  or
otherwise   in  a  reasonable  manner  makes   the
statement and items available to the customer, the
customer   must   exercise  reasonable  care   and
promptness to examine  the  statement and items to
discover   his  unauthorized  signature   or   any
alteration on an  item  and  must  notify the bank
promptly after discovery thereof.
    (2) If the bank establishes that the  customer
failed with respect to  an item to comply with the
duties  imposed on the customer by subsection  (1)
the customer is  precluded  from asserting against
the  bank  (a) his unauthorized signature  or  any
alteration  on   the   item   if   the  bank  also
establishes  that it suffered a loss by reason  of
such failure; and (b) an unauthorized signature or
alteration by the same wrongdoer on any other item
paid in good faith  by  the  bank  after the first
item  and statement was available to the  customer
for a reasonable  period  not  exceeding  fourteen
calendar   days  and  before  the  bank   receives
notification  from  the   customer   of  any  such
unauthorized signature or alteration.
    (3)  The preclusion under subsection (2)  does
not apply if  the  customer  establishes  lack  of
ordinary  care on the part of the bank  in  paying
the item.
    (4) Without regard to  care or lack of care of
either  the  customer or the bank a  customer  who
does  not  within  one  year  from  the  time  the
statement  and  items are made  available  to  the
customer as provided  in  subsection  (1) discover
and  report  his  unauthorized  signature  or  any
alteration on the face or back of the item or does
not within three years from that time discover and
report any unauthorized  endorsement  is precluded
from asserting against the bank such  unauthorized
signature or endorsement or such alteration.
    (5) If under this  section  a payor bank has a
valid  defense against a claim of a customer  upon
or resulting from payment of an item and waives or
fails upon request to assert the defense the  bank
may not  assert  against  any  collecting  bank or
other  prior party presenting or transferring  the
item a claim based upon the unauthorized signature
or   alteration  giving  rise  to  the  customer's
claim.]
    (a) A BANK THAT SENDS  OR MAKES AVAILABLE TO A
CUSTOMER A STATEMENT OF ACCOUNT SHOWING PAYMENT OF
ITEMS FOR THE ACCOUNT  SHALL EITHER RETURN OR MAKE
AVAILABLE  TO  THE  CUSTOMER  THE  ITEMS  PAID  OR
PROVIDE INFORMATION IN  THE  STATEMENT  OF ACCOUNT
SUFFICIENT  TO  ALLOW THE CUSTOMER  REASONABLY  TO
IDENTIFY THE ITEMS PAID.  THE STATEMENT OF ACCOUNT
PROVIDES  SUFFICIENT  INFORMATION IF THE  ITEM  IS
DESCRIBED BY  ITEM  NUMBER,   AMOUNT,  AND DATE OF
PAYMENT.
    (b)  IF  THE  ITEMS ARE NOT  RETURNED  TO  THE
CUSTOMER, THE  PERSON  RETAINING  THE  ITEMS SHALL
EITHER  RETAIN  THE  ITEMS OR,  IF THE  ITEMS  ARE
DESTROYED,   MAINTAIN  THE   CAPACITY  TO  FURNISH
LEGIBLE  COPIES OF THE ITEMS UNTIL THE  EXPIRATION
OF SEVEN YEARS  AFTER  RECEIPT  OF  THE  ITEMS.  A
CUSTOMER  MAY REQUEST AN ITEM FROM THE  BANK  THAT
PAID THE ITEM, AND  THAT  BANK  MUST  PROVIDE IN A
REASONABLE  TIME EITHER THE ITEM OR, IF  THE  ITEM
HAS BEEN DESTROYED OR IS NOT OTHERWISE OBTAINABLE,
A LEGIBLE COPY OF THE ITEM.
    (c)  IF  A  BANK SENDS OR  MAKES  AVAILABLE  A
STATEMENT  OF   ACCOUNT   OR   ITEMS  PURSUANT  TO
SUBSECTION   (a),   THE  CUSTOMER  MUST   EXERCISE
REASONABLE PROMPTNESS IN  EXAMINING  THE STATEMENT
OR  THE ITEMS TO DETERMINE WHETHER ANY PAYMENT WAS
NOT AUTHORIZED BECAUSE OF AN ALTERATION OF AN ITEM
OR  BECAUSE A PURPORTED SIGNATURE BY OR ON  BEHALF
OF THE CUSTOMER WAS NOT AUTHORIZED.  IF,  BASED ON
THE  STATEMENT  OR ITEMS PROVIDED,   THE  CUSTOMER
SHOULD REASONABLY HAVE DISCOVERED THE UNAUTHORIZED
PAYMENT,   THE CUSTOMER MUST PROMPTLY  NOTIFY  THE
BANK OF THE RELEVANT FACTS.
    (d) IF  THE  BANK  PROVES  THAT  THE  CUSTOMER
FAILED,  WITH RESPECT TO AN ITEM,  TO COMPLY  WITH
THE DUTIES IMPOSED ON  THE  CUSTOMER BY SUBSECTION
(c),  THE  CUSTOMER  IS PRECLUDED  FROM  ASSERTING
AGAINST THE BANK: (1) THE  CUSTOMER'S UNAUTHORIZED
SIGNATURE  OR ANY ALTERATION ON THE ITEM,  IF  THE
BANK ALSO PROVES THAT IT SUFFERED A LOSS BY REASON
OF   THE   FAILURE;   AND   (2)   THE   CUSTOMER'S
UNAUTHORIZED SIGNATURE  OR  ALTERATION BY THE SAME
WRONGDOER ON ANY OTHER ITEM PAID IN GOOD FAITH  BY
THE BANK IF THE PAYMENT  WAS  MADE BEFORE THE BANK
RECEIVED   NOTICE   FROM  THE  CUSTOMER   OF   THE
UNAUTHORIZED SIGNATURE OR ALTERATION AND AFTER THE
CUSTOMER HAD BEEN AFFORDED A REASONABLE PERIOD  OF
TIME,  NOT  EXCEEDING  THIRTY  DAYS,   IN WHICH TO
EXAMINE  THE  ITEM  OR STATEMENT  OF  ACCOUNT  AND
NOTIFY THE BANK.
    (e) IF SUBSECTION (d) APPLIES AND THE CUSTOMER
PROVES  THAT THE BANK FAILED TO EXERCISE  ORDINARY
CARE IN  PAYING  THE  ITEM  AND  THAT  THE FAILURE
SUBSTANTIALLY  CONTRIBUTED  TO LOSS,  THE LOSS  IS
ALLOCATED BETWEEN THE  CUSTOMER  PRECLUDED AND THE
BANK  ASSERTING  THE PRECLUSION ACCORDING  TO  THE
EXTENT TO WHICH  THE  FAILURE  OF  THE CUSTOMER TO
COMPLY WITH SUBSECTION (c) AND THE FAILURE OF  THE
BANK TO EXERCISE  ORDINARY CARE CONTRIBUTED TO THE
LOSS. IF THE CUSTOMER PROVES THAT THE BANK DID NOT
PAY THE ITEM IN GOOD  FAITH,  THE PRECLUSION UNDER
SUBSECTION (d) DOES NOT APPLY.
    (f) WITHOUT REGARD TO CARE OR LACK OF CARE  OF
EITHER THE CUSTOMER OR  THE  BANK,  A CUSTOMER WHO
DOES  NOT WITHIN ONE YEAR AFTER THE  STATEMENT  OR
ITEMS  ARE   MADE   AVAILABLE   TO   THE  CUSTOMER
(SUBSECTION   (a))   DISCOVER   AND   REPORT   THE
CUSTOMER'S    UNAUTHORIZED   SIGNATURE   ON OR ANY
ALTERATION ON THE ITEM IS PRECLUDED FROM ASSERTING
AGAINST THE BANK  THE  UNAUTHORIZED  SIGNATURE  OR
ALTERATION.   IF THERE IS A PRECLUSION UNDER  THIS
SUBSECTION, THE  PAYOR  BANK  MAY  NOT RECOVER FOR
BREACH  OF  WARRANTY UNDER SECTION 42a-4-208  WITH
RESPECT   TO   THE   UNAUTHORIZED   SIGNATURE   OR
ALTERATION TO WHICH THE PRECLUSION APPLIES.
    Sec.   103.  Section 42a-4-407 of the  general
statutes  is   repealed   and   the  following  is
substituted in lieu thereof:
    [If  a  payor bank has paid an item  over  the
stop payment  order  of  the  drawer  or  maker or
otherwise  under circumstances giving a basis  for
objection  by  the  drawer  or  maker,  to prevent
unjust enrichment and only to the extent necessary
to prevent loss  to  the  bank  by  reason  of its
payment  of  the item,  the payor  bank  shall  be
subrogated to the rights  (a) of any holder in due
course  on  the item against the drawer or  maker;
and (b) of the payee or  any  other  holder of the
item  against  the drawer or maker either  on  the
item or under  the  transaction  out  of which the
item arose; and (c) of the drawer or maker against
the payee or any  other  holder  of  the item with
respect  to the transaction out of which the  item
arose.]
    IF A PAYOR  BANK  HAS  PAID  AN  ITEM OVER THE
ORDER  OF THE DRAWER OR MAKER TO STOP PAYMENT,  OR
AFTER AN ACCOUNT  HAS  BEEN  CLOSED,  OR OTHERWISE
UNDER  CIRCUMSTANCES GIVING A BASIS FOR  OBJECTION
BY  THE  DRAWER  OR   MAKER,   TO  PREVENT  UNJUST
ENRICHMENT  AND  ONLY TO THE EXTENT  NECESSARY  TO
PREVENT LOSS TO THE BANK  BY REASON OF ITS PAYMENT
OF  THE ITEM, THE PAYOR BANK IS SUBROGATED TO  THE
RIGHTS:  (1) OF  ANY  HOLDER  IN DUE COURSE ON THE
ITEM AGAINST THE DRAWER OR MAKER; (2) OF THE PAYEE
OR ANY OTHER HOLDER OF THE ITEM AGAINST THE DRAWER
OR   MAKER  EITHER  ON  THE  ITEM  OR  UNDER   THE
TRANSACTION OUT OF WHICH  THE  ITEM AROSE; AND (3)
OF  THE DRAWER OR MAKER AGAINST THE PAYEE  OR  ANY
OTHER HOLDER  OF  THE  ITEM  WITH  RESPECT  TO THE
TRANSACTION OUT OF WHICH THE ITEM AROSE.
    Sec.   104.  Section 42a-4-501 of the  general
statutes  is   repealed   and   the  following  is
substituted in lieu thereof:
    [A  bank which takes a documentary  draft  for
collection  must  present  or  send  the draft and
accompanying  documents for presentment  and  upon
learning  that  the  draft  has  not  been paid or
accepted in due course must seasonably notify  its
customer of  such  fact  even  though  it may have
discounted  or bought the draft or extended credit
available for withdrawal as of right.]
    A BANK THAT  TAKES  A  DOCUMENTARY  DRAFT  FOR
COLLECTION  SHALL  PRESENT OR SEND THE  DRAFT  AND
ACCOMPANYING DOCUMENTS  FOR  PRESENTMENT AND, UPON
LEARNING  THAT  THE  DRAFT HAS NOT  BEEN  PAID  OR
ACCEPTED IN DUE COURSE,  SHALL  SEASONABLY  NOTIFY
ITS  CUSTOMER OF THE FACT EVEN THOUGH IT MAY  HAVE
DISCOUNTED OR BOUGHT THE DRAFT  OR EXTENDED CREDIT
AVAILABLE FOR WITHDRAWAL AS OF RIGHT.
    Sec.   105.  Section 42a-4-502 of the  general
statutes  is   repealed   and   the  following  is
substituted in lieu thereof:
    [When  a  draft or the  relevant  instructions
require presentment  "on  arrival",   "when  goods
arrive"  or the like, the collecting bank need not
present until in its  judgment  a  reasonable time
for  arrival of the goods has expired.  Refusal to
pay or accept because  the  goods have not arrived
is  not  dishonor;   the  bank  must  notify   its
transferor of  such  refusal  but need not present
the draft again until it is instructed to do so or
learns of the arrival of the goods.]
    IF  A  DRAFT  OR  THE   RELEVANT  INSTRUCTIONS
REQUIRE  PRESENTMENT  "ON ARRIVAL",   "WHEN  GOODS
ARRIVE" OR THE LIKE, THE  COLLECTING BANK NEED NOT
PRESENT  UNTIL  IN ITS JUDGMENT A REASONABLE  TIME
FOR ARRIVAL OF THE GOODS  HAS EXPIRED.  REFUSAL TO
PAY  OR ACCEPT BECAUSE THE GOODS HAVE NOT  ARRIVED
IS  NOT  DISHONOR;   THE   BANK  MUST  NOTIFY  ITS
TRANSFEROR OF THE REFUSAL BUT NEED NOT PRESENT THE
DRAFT AGAIN UNTIL IT  IS  INSTRUCTED  TO  DO SO OR
LEARNS OF THE ARRIVAL OF THE GOODS.
    Sec.   106.  Section 42a-4-503 of the  general
statutes  is   repealed   and   the  following  is
substituted in lieu thereof:
    [Unless  otherwise  instructed and  except  as
provided  in  article   5   a  bank  presenting  a
documentary  draft (a) must deliver the  documents
to the drawee on  acceptance of the draft if it is
payable  more  than three days after  presentment;
otherwise, only on payment; and (b) upon dishonor,
either  in the case of presentment for  acceptance
or presentment for  payment,  may  seek and follow
instructions  from  any referee in  case  of  need
designated in the draft  or if the presenting bank
does  not  choose to utilize his services it  must
use diligence and  good  faith  to  ascertain  the
reason for dishonor, must notify its transferor of
the dishonor and of the  results  of its effort to
ascertain  the  reasons therefor and must  request
instructions.  But the presenting bank is under no
obligation  with  respect to goods represented  by
the documents  except  to  follow  any  reasonable
instructions  seasonably received; it has a  right
to  reimbursement  for  any  expense  incurred  in
following  instructions  and to prepayment  of  or
indemnity for such expenses.]
    UNLESS  OTHERWISE  INSTRUCTED  AND  EXCEPT  AS
PROVIDED  IN  ARTICLE  5,   A  BANK  PRESENTING  A
DOCUMENTARY DRAFT: (1)  MUST DELIVER THE DOCUMENTS
TO  THE DRAWEE ON ACCEPTANCE OF THE DRAFT IF IT IS
PAYABLE MORE THAN THREE  DAYS  AFTER  PRESENTMENT;
OTHERWISE, ONLY ON PAYMENT; AND (2) UPON DISHONOR,
EITHER IN THE CASE OF  PRESENTMENT  FOR ACCEPTANCE
OR  PRESENTMENT  FOR PAYMENT, MAY SEEK AND  FOLLOW
INSTRUCTIONS FROM  ANY  REFEREE  IN  CASE  OF NEED
DESIGNATED IN THE DRAFT OR, IF THE PRESENTING BANK
DOES NOT CHOOSE TO UTILIZE THE REFEREE'S SERVICES,
IT MUST USE DILIGENCE AND GOOD FAITH TO  ASCERTAIN
THE  REASON  FOR   DISHONOR,    MUST   NOTIFY  ITS
TRANSFEROR  OF THE DISHONOR AND OF THE RESULTS  OF
ITS EFFORT TO ASCERTAIN THE  REASONS THEREFOR, AND
MUST REQUEST INSTRUCTIONS.  HOWEVER THE PRESENTING
BANK IS UNDER NO  OBLIGATION WITH RESPECT TO GOODS
REPRESENTED  BY THE DOCUMENTS EXCEPT TO FOLLOW ANY
REASONABLE INSTRUCTIONS  SEASONABLY  RECEIVED;  IT
HAS  A  RIGHT  TO REIMBURSEMENT  FOR  ANY  EXPENSE
INCURRED   IN   FOLLOWING   INSTRUCTIONS   AND  TO
PREPAYMENT OF OR INDEMNITY FOR THOSE EXPENSES.
    Sec.   107.  Section 42a-4-504 of the  general
statutes  is   repealed   and   the  following  is
substituted in lieu thereof:
    [(1)  A presenting bank which,  following  the
dishonor of a  documentary  draft,  has seasonably
requested  instructions but does not receive  them
within a  reasonable  time  may  store,  sell,  or
otherwise  deal  with the goods in any  reasonable
manner.
    (2) For  its  reasonable  expenses incurred by
action  under  subsection (1) the presenting  bank
has a lien upon the goods or their proceeds, which
may be foreclosed in the same manner as an  unpaid
seller's lien.]
    (a) A PRESENTING  BANK  THAT,   FOLLOWING  THE
DISHONOR  OF A DOCUMENTARY DRAFT,  HAS  SEASONABLY
REQUESTED INSTRUCTIONS  BUT  DOES NOT RECEIVE THEM
WITHIN  A  REASONABLE TIME MAY STORE,   SELL,   OR
OTHERWISE DEAL WITH  THE  GOODS  IN ANY REASONABLE
MANNER.
    (b)  FOR ITS REASONABLE EXPENSES  INCURRED  BY
ACTION UNDER SUBSECTION  (a),  THE PRESENTING BANK
HAS A LIEN UPON THE GOODS OR THEIR PROCEEDS, WHICH
MAY BE FORECLOSED IN THE SAME  MANNER AS AN UNPAID
SELLER'S LIEN.
    Sec.    108.   Subdivision  (20)  of   section
42a-1-201 of the general  statutes is repealed and
the following is substituted in lieu thereof:
    (20)  "Holder",   [means a person  who  is  in
possession of a document of title or an instrument
or  a  certificated  investment  security   drawn,
issued, or  indorsed  to  him  or  his order or to
bearer  or in blank] WITH RESPECT TO A  NEGOTIABLE
INSTRUMENT, MEANS THE  PERSON IN POSSESSION IF THE
INSTRUMENT IS PAYABLE TO BEARER OR, IN THE CASE OF
AN INSTRUMENT PAYABLE TO AN IDENTIFIED PERSON,  IF
THE IDENTIFIED PERSON IS IN POSSESSION.   "HOLDER"
WITH RESPECT  TO  A  DOCUMENT  OF  TITLE MEANS THE
PERSON  IN POSSESSION IF THE GOODS ARE DELIVERABLE
TO BEARER  OR  TO  THE  ORDER  OF  THE  PERSON  IN
POSSESSION.
    Sec.    109.   Subdivision  (24)  of   section
42a-1-201 of the general  statutes is repealed and
the following is substituted in lieu thereof:
    (24)  "Money"  means  a  medium  of   exchange
authorized or  adopted  by  a  domestic or foreign
government   [as  a  part  of  its  currency]  AND
INCLUDES A MONETARY UNIT OF ACCOUNT ESTABLISHED BY
AN INTERGOVERNMENTAL ORGANIZATION OR BY  AGREEMENT
BETWEEN TWO OR MORE NATIONS.
    Sec.   110.    Subdivision   (43)  of  section
42a-1-201 of the general statutes is repealed  and
the following is substituted in lieu thereof:
    (43) "Unauthorized" signature [or indorsement]
means  one  made  without  actual,  implied,    or
apparent authority and includes a forgery.
    Sec.  111.  Section  42a-1-207  of the general
statutes   is  repealed  and  the   following   is
substituted in lieu thereof:
    [A party  who  with  explicit  reservation  of
rights performs or promises performance or assents
to performance in a  manner demanded or offered by
the  other  party does not thereby  prejudice  the
rights   reserved.    Such   words   as   "without
prejudice",   "under  protest"  or  the  like  are
sufficient.]
    (1) A PARTY WHO, WITH  EXPLICIT RESERVATION OF
RIGHTS,   PERFORMS  OR  PROMISES  PERFORMANCE   OR
ASSENTS TO  PERFORMANCE  IN  A  MANNER DEMANDED OR
OFFERED  BY  THE  OTHER  PARTY  DOES  NOT  THEREBY
PREJUDICE  THE  RIGHTS  RESERVED.   SUCH  WORDS AS
"WITHOUT  PREJUDICE", "UNDER PROTEST" OR THE  LIKE
ARE SUFFICIENT.
    (2) SUBSECTION (1) DOES NOT APPLY TO AN ACCORD
AND SATISFACTION.
    Sec.   112.  Sections 42a-3-120 to  42a-3-122,
inclusive,  42a-3-208,   42a-3-506  to  42a-3-511,
inclusive,  42a-3-606,  42a-3-701 and 42a-3-801 to
42a-3-805, inclusive, of the  general statutes are
repealed.