Acceptance of negotiable instruments as evidence of consumer debt.

In a consumer credit sale, the seller may not take as evidence of the obligation of the buyer, a negotiable instrument other than (1) a check; or (2) a promise or order containing 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. A holder is not a holder in due course if the holder takes a negotiable instrument with notice that it is issued in violation of this section. A holder in due course is not subject to the liabilities prescribed in this chapter.

(Acts 1971, No. 2052, p. 3290, §4; Acts 1995, No. 95-668, p. 1381, §4; Acts 1996, No. 96-576, p. 887, §2.)