If an obligee releasing or discharging an obligor without express reservation of rights against a co-obligor, then knows or has reason to know that the obligor released or discharged did not pay so much of the claim as he was bound by his contract or relation with the co-obligor to pay, the obligee’s claim against that co-obligor shall be satisfied to the amount which the obligee knew or had reason to know that the released or discharged obligor was bound to such co-obligor to pay. [PL 1965, c. 351, §1 (NEW).]

If an obligee so releasing or discharging, an obligor has not then such knowledge or reason to know, the obligee’s claim against the co-obligor shall be satisfied to the extent of the lesser of 2 amounts, namely; the amount of the fractional share of the obligor released or discharged, or the amount that such obligor was bound by his contract or relation with the co-obligor to pay. [PL 1965, c. 351, §1 (NEW).]