N.Y. Uniform Commercial Code 3-601 – Discharge of Parties
Section 3–601. Discharge of Parties.
Terms Used In N.Y. Uniform Commercial Code 3-601
- Contract: A legal written agreement that becomes binding when signed.
- Instrument: means a negotiable instrument. See N.Y. Uniform Commercial Code 3-102
- Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
(1) The extent of the discharge of any party from liability on an instrument is governed by the sections on
(a) payment or satisfaction (Section 3–603); or
(b) tender of payment (Section 3–604); or
(c) cancellation or renunciation (Section 3–605); or
(d) impairment of right of recourse or of collateral (Section
3–606); or
(e) reacquisition of the instrument by a prior party (Section
3–208); or
(f) fraudulent and material alteration (Section 3–407); or
(g) certification of a check (Section 3–411); or
(h) acceptance varying a draft (Section 3–412); or
(i) unexcused delay in presentment or notice of dishonor or
protest (Section 3–502).
(2) Any party is also discharged from his liability on an instrument to another party by any other act or agreement with such party which would discharge his simple contract for the payment of money.
(3) The liability of all parties is discharged when any party who has himself no right of action or recourse on the instrument
(a) reacquires the instrument in his own right; or
(b) is discharged under any provision of this Article, except as
otherwise provided with respect to discharge for impairment
of recourse or of collateral (Section 3–606).