(810 ILCS 5/3-106) (from Ch. 26, par. 3-106)
Sec. 3-106.
Unconditional promise or order.
(a) Except as provided in this Section, for the purposes of Section
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 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 3-104(a); but if the promise or
order is an instrument, there cannot be a holder in due course of the
instrument.
(Source: P.A. 87-582; 87-1135.)
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