Ch. 91                                      1996 LAWS OF MARYLAND

PROMISE HAS NOT BEEN PERFORMED. IF AN INSTRUMENT IS ISSUED FOR VALUE AS
STATED IN SUBSECTION (A), THE INSTRUMENT IS ALSO ISSUED FOR
CONSIDERATION.

3-304.

(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, 90 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 INSTALLMENTS AND A DUE DATE
HAS NOT BEEN ACCELERATED, THE INSTRUMENT BECOMES OVERDUE UPON
DEFAULT UNDER THE INSTRUMENT FOR NONPAYMENT OF AN INSTALLMENT, AND
THE INSTRUMENT REMAINS OVERDUE UNTIL THE DEFAULT IS CURED.

(2)     IF THE PRINCIPAL IS NOT PAYABLE IN INSTALLMENTS 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.

3-305.

(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;

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