Question

Does Revised Article 3 eliminate the particular fund doctrine by providing that a promise or order is not made conditional because payment is to be made only out of a particular fund? a) Yes b) No

Answer 1

Yes, the Revised Article 3 does eliminate the particular fund doctrine, treating references to such funds as mere intentions of the source of payment rather than conditions of the promise.

Step-by-step explanation:

Yes, the Revised Article 3 of the Uniform Commercial Code (UCC) eliminates the particular fund doctrine. Prior to the revision, the doctrine made it necessary for payment to be made out of a specific fund, thereby making the order or promise conditional on the availability of that fund. However, this doctrine has been abolished with the revision stating that a promise or order is not made conditional, even if the payment is specified to be made from a particular fund.

Basically, under the Revised Article 3, it does not limit or restrict the source of payment to a particular fund and treats any reference to such a fund as merely a statement of the intended source of payment, not a condition of the promise or order.

Learn more about Revised Article 3 and particular fund doctrine