(1) The obligation of a party to pay the instrument is discharged as stated in this article or by an act or agreement with the party which would discharge an obligation to pay money under a simple contract.
(2) Discharge of the obligation of a party is not effective against a person acquiring rights of a holder in due course of the instrument without notice of the discharge.

Terms Used In Kentucky Statutes 355.3-601

  • Contract: A legal written agreement that becomes binding when signed.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.

Effective: January 1, 1997
History: Repealed and reenacted 1996 Ky. Acts ch. 130, sec. 64, effective January 1,
1997. — Created 1958 Ky. Acts ch. 77, sec. 3-601, effective July 1, 1960.