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Illinois Compiled Statutes
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COMMERCIAL CODE (810 ILCS 5/) Uniform Commercial Code. 810 ILCS 5/Art. 3 Pt. 1
(810 ILCS 5/Art. 3 Pt. 1 heading)
PART 1.
GENERAL PROVISIONS AND DEFINITIONS
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810 ILCS 5/3-101
(810 ILCS 5/3-101) (from Ch. 26, par. 3-101)
Sec. 3-101.
Short title.
This Article may be cited as Uniform Commercial
Code-Negotiable Instruments.
(Source: P.A. 87-582.)
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810 ILCS 5/3-102
(810 ILCS 5/3-102) (from Ch. 26, par. 3-102)
Sec. 3-102.
Subject matter.
(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.
(Source: P.A. 87-582; 87-1135.)
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810 ILCS 5/3-103
(810 ILCS 5/3-103) (from Ch. 26, par. 3-103)
Sec. 3-103. Definitions.
(a) In this Article:
(1) "Acceptor" means a drawee that has accepted a | |
(2) "Drawee" means a person ordered in a draft to
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(3) "Drawer" means a person who signs or is
| | identified in a draft as a person ordering payment.
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(4) "Good faith" means honesty in fact and the
| | observance of reasonable commercial standards of fair dealing.
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(5) "Maker" means a person who signs or is identified
| | in a note as a person undertaking to pay.
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(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.
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(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.
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(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.
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(10) "Prove" with respect to a fact means to meet the
| | burden of establishing the fact (Section 1-201(b)(8)).
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(11) "Remitter" means a person that purchases an
| | instrument from its issuer if the instrument is payable to an identified person other than the purchaser.
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(b) Other definitions applying to this Article and the Sections in which
they appear are:
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"Acceptance" |
Section 3-409 |
"Accommodated party" |
Section 3-419 |
"Accommodation party" |
Section 3-419 |
"Alteration" |
Section 3-407 |
"Anomalous indorsement" |
Section 3-205 |
"Blank indorsement" |
Section 3-205 |
"Cashier's check" |
Section 3-104 |
"Certificate of deposit" |
Section 3-104 |
"Certified check" |
Section 3-409 |
"Check" |
Section 3-104 |
"Consideration" |
Section 3-303 |
"Draft" |
Section 3-104 |
"Holder in due course" |
Section 3-302 |
"Incomplete instrument" |
Section 3-115 |
"Indorsement" |
Section 3-204 |
"Indorser" |
Section 3-204 |
"Instrument" |
Section 3-104 |
"Issue" |
Section 3-105 |
"Issuer" |
Section 3-105 |
"Negotiable instrument" |
Section 3-104 |
"Negotiation" |
Section 3-201 |
"Note" |
Section 3-104 |
"Payable at a definite time" |
Section 3-108 |
"Payable on demand" |
Section 3-108 |
"Payable to bearer" |
Section 3-109 |
"Payable to order" |
Section 3-109 |
"Payment" |
Section 3-602 |
"Person entitled to enforce" |
Section 3-301 |
"Presentment" |
Section 3-501 |
"Reacquisition" |
Section 3-207 |
"Special indorsement" |
Section 3-205 |
"Teller's check" |
Section 3-104 |
"Transfer of instrument" |
Section 3-203 |
"Traveler's check" |
Section 3-104 |
"Value" |
Section 3-303 |
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(c) The following definitions in other Articles apply to this Article:
| "Bank" | Section 4-105 | "Banking day" | Section 4-104 | "Clearing house" | Section 4-104 | "Collecting bank" | Section 4-105 | "Depositary bank" | Section 4-105 | "Documentary draft" | Section 4-104 | "Intermediary bank" | Section 4-105 | "Item" | Section 4-104 | "Payor bank" | Section 4-105 | "Suspends payments" | Section 4-104. |
| (d) In addition, Article 1 contains general definitions and principles
of construction and interpretation applicable throughout this Article.
(Source: P.A. 95-895, eff. 1-1-09 .)
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810 ILCS 5/3-104
(810 ILCS 5/3-104) (from Ch. 26, par. 3-104)
Sec. 3-104.
Negotiable instrument.
(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;
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(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 any obligor.
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(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 as "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.
(Source: P.A. 87-582; 87-1135.)
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810 ILCS 5/3-105
(810 ILCS 5/3-105) (from Ch. 26, par. 3-105)
Sec. 3-105.
Issue of instrument.
(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.
(Source: P.A. 87-582; 87-1135.)
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810 ILCS 5/3-106
(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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810 ILCS 5/3-107
(810 ILCS 5/3-107) (from Ch. 26, par. 3-107)
Sec. 3-107.
Instrument payable in foreign money.
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.
(Source: P.A. 87-582.)
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810 ILCS 5/3-108
(810 ILCS 5/3-108) (from Ch. 26, par. 3-108)
Sec. 3-108.
Payable on demand or at a definite time.
(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.
(Source: P.A. 87-582; 87-1135.)
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810 ILCS 5/3-109
(810 ILCS 5/3-109) (from Ch. 26, par. 3-109)
Sec. 3-109.
Payable to bearer or to order.
(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;
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(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.
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(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 3-205(a). An
instrument payable to an identified person may become payable to bearer if
it is indorsed in blank pursuant to Section 3-205(b).
(Source: P.A. 87-582; 87-1135.)
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810 ILCS 5/3-110
(810 ILCS 5/3-110) (from Ch. 26, par. 3-110)
Sec. 3-110.
Identification of person to whom instrument is payable.
(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 checkwriting 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.
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(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;
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(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;
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(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
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(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.
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(d) If an instrument is payable to 2 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 2 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 2 or more persons is ambiguous as to whether it
is payable to the persons alternatively, the instrument is payable to the
persons alternatively.
(Source: P.A. 87-582; 87-1135.)
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810 ILCS 5/3-111
(810 ILCS 5/3-111) (from Ch. 26, par. 3-111)
Sec. 3-111.
Place of payment.
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.
(Source: P.A. 87-582.)
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810 ILCS 5/3-112
(810 ILCS 5/3-112) (from Ch. 26, par. 3-112)
Sec. 3-112.
Interest.
(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.
(Source: P.A. 87-582; 87-1135.)
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810 ILCS 5/3-113
(810 ILCS 5/3-113) (from Ch. 26, par. 3-113)
Sec. 3-113.
Date of instrument.
(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 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.
(Source: P.A. 87-582.)
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810 ILCS 5/3-114
(810 ILCS 5/3-114) (from Ch. 26, par. 3-114)
Sec. 3-114.
Contradictory terms of instrument.
If an instrument contains
contradictory terms, typewritten terms prevail over printed terms,
handwritten terms prevail over both, and words prevail over numbers.
(Source: P.A. 87-582.)
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810 ILCS 5/3-115
(810 ILCS 5/3-115) (from Ch. 26, par. 3-115)
Sec. 3-115.
Incomplete instrument.
(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 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 3-104, but, after completion, the requirements of Section 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 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.
(Source: P.A. 87-582; 87-1135.)
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810 ILCS 5/3-116
(810 ILCS 5/3-116) (from Ch. 26, par. 3-116)
Sec. 3-116.
Joint and several liability; contribution.
(a) Except as otherwise provided in the instrument, 2 or more persons
who have the same liability on an instrument as makers, drawers, acceptors,
indorsers who are indorsing joint payees, or anomalous indorsers are
jointly and severally liable in the capacity in which they sign.
(b) Except as provided in Section 3-419(e) or by agreement of the
affected parties, a party having joint and several liability that 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.
(Source: P.A. 87-582.)
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810 ILCS 5/3-117
(810 ILCS 5/3-117) (from Ch. 26, par. 3-117)
Sec. 3-117.
Other agreements affecting an instrument.
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.
(Source: P.A. 87-582; 87-1135.)
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810 ILCS 5/3-118
(810 ILCS 5/3-118) (from Ch. 26, par. 3-118)
Sec. 3-118.
Statute of limitations.
(a) (Blank).
(b) (Blank).
(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 3 years after dishonor of the draft or 10 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 3 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 6 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 6-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 6 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 6 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 3
years after the cause of action accrues.
(Source: P.A. 90-451, eff. 1-1-98.)
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810 ILCS 5/3-119
(810 ILCS 5/3-119) (from Ch. 26, par. 3-119)
Sec. 3-119.
Notice of right to defend action.
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 2
litigations, the person notified is so bound unless after seasonable
receipt of the notice the person notified does come in and defend.
(Source: P.A. 87-582.)
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