What rules does the court apply when determining negotiability?

The UCC favors negotiability of commercial instruments. It contains a number of rules to resolve any uncertainty as to the terms of the instrument and to supply missing terms. The following rules apply to situations where terms in a negotiable instrument contradict each other:

• words take precedent over numbers;
• handwritten terms prevail over typed and printed terms; and
• typed terms win over printed or boiler-plate terms.

These rules can allow for any number of general assumptions about the intent and obligations of the parties.

Example: If the applicable interest rate of a promissory note is left off, courts hold that a judgment rate applies.