41-03-04. If the person whose specimen signature appears on an instrument fails to
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/nd/title-41/chapter-41-03-negotiable-instruments/41-03-04·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
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.
4. 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 subsection 1 of section 41-03-04, but if the
promise or order is an instrument, there cannot be a holder in due course of the
instrument.