KANSAS OFFICE of
  REVISOR of STATUTES

  

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84-3-112. Interest. (a) Unless otherwise provided in the instrument, (1) an instrument is not payable with interest, and (2) 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.

History: L. 1991, ch. 296, § 12; February 1, 1992.

KANSAS COMMENT, 1996

This provision is identical to the 1995 Official Text. The provision for interest at the judgment rate where the rate is not specified is adapted from the prior provisions of 84-3-118(d). Historical case and statutory references may be obtained from the 1965 or 1983 bound Volume 7 of the Kansas Statutes Annotated.

This is a major change from prior law. Under prior law, some courts held that the requirement that an instrument had to be for a sum certain, as required by the current and prior versions of 84-3-104, destroyed the negotiability of variable rate instruments requiring reference to sources of rates which were not on the note. This section overrides those decisions, and broadens the definition of an instrument to include variable rate notes. Note that the section provides that a provision for interest permits a reference to an outside source. A provision for variable principal is not authorized by this section.

Revisor's Note:

Former section 84-3-112 was repealed by L. 1991, ch. 296, § 111 and the number reassigned to the current text.


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