Printable Format84-3-108. Payable on demand or at a definite time. (a) A promise or order is "payable on demand" if it (1) states that it is payable on demand or at sight, or otherwise indicates that it is payable at the will of the holder, or (2) 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 (1) prepayment, (2) acceleration, (3) extension at the option of the holder, or (4) 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.
History: L. 1991, ch. 296, § 8; February 1, 1992.
KANSAS COMMENT, 1996
This section does not vary from the 1995 Official Text, and was drawn from the prior provisions of 84-3-109. An instrument payable on demand does not require any default on the part of the debtor before the previously anticipated due date, thus making it an extremely useful device for the creditor. For example, demand could be made when interest rates advance to a level where the creditor wants to force a refinancing at market rates, or when an employee who was given a preferential loan leaves the creditor's employment. For a leading UCC decision which broadly validates demand notes, see Fulton National Bank v. Willis Denney Ford, Inc., 269 S.E.2d 916 (Ga. App. 1980). See also, Official Comment to 84-1-208. The ability to extend the time of payment does not affect negotiability as long as it is at the option of the holder. If the maker or acceptor has the right to extend the due date, the extension can only be to a later definite date. 84-3-108(b)(4).
Revisor's Note:
Former section 84-3-108 was repealed by L. 1991, ch. 296, § 111 and the number reassigned to the current text.