3601. (a) The obligation of a party to pay the instrument is
discharged as stated in this division or by an act or agreement with
the party which would discharge an obligation to pay money under a
simple contract.
(b) 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.
3602. (a) Subject to subdivision (b), an instrument is paid to the
extent payment is made (1) by or on behalf of a party obliged to pay
the instrument, and (2) to a person entitled to enforce the
instrument. To the extent of the payment, the obligation of the party
obliged to pay the instrument is discharged even though payment is
made with knowledge of a claim to the instrument under Section 3306
by another person.
(b) The obligation of a party to pay the instrument is not
discharged under subdivision (a) if either of the following applies:
(1) A claim to the instrument under Section 3306 is enforceable
against the party receiving payment and (A) payment is made with
knowledge by the payor that payment is prohibited by injunction or
similar process of a court of competent jurisdiction, or (B) in the
case of an instrument other than a cashier's check, teller's check,
or certified check, the party making payment accepted, from the
person having a claim to the instrument, indemnity against loss
resulting from refusal to pay the person entitled to enforce the
instrument.
(2) The person making payment knows that the instrument is a
stolen instrument and pays a person it knows is in wrongful
possession of the instrument.
3603. (a) If tender of payment of an obligation to pay an
instrument is made to a person entitled to enforce the instrument,
the effect of tender is governed by principles of law applicable to
tender of payment under a simple contract.
(b) If tender of payment of an obligation to pay an instrument is
made to a person entitled to enforce the instrument and the tender is
refused, there is discharge, to the extent of the amount of the
tender, of the obligation of an indorser or accommodation party
having a right of recourse with respect to the obligation to which
the tender relates.
(c) If tender of payment of an amount due on an instrument is made
to a person entitled to enforce the instrument, the obligation of
the obligor to pay interest after the due date on the amount tendered
is discharged. If presentment is required with respect to an
instrument and the obligor is able and ready to pay on the due date
at every place of payment stated in the instrument, the obligor is
deemed to have made tender of payment on the due date to the person
entitled to enforce the instrument.
3604. (a) A person entitled to enforce an instrument, with or
without consideration, may discharge the obligation of a party to pay
the instrument (1) by an intentional voluntary act, such as
surrender of the instrument to the party, destruction, mutilation, or
cancellation of the instrument, cancellation or striking out of the
party's signature, or the addition of words to the instrument
indicating discharge, or (2) by agreeing not to sue or otherwise
renouncing rights against the party by a signed writing.
(b) Cancellation or striking out of an indorsement pursuant to
subdivision (a) does not affect the status and rights of a party
derived from the indorsement.
3605. (a) In this section, the term "indorser" includes a drawer
having the obligation described in subdivision (d) of Section 3414.
(b) Discharge, under Section 3604, of the obligation of a party to
pay an instrument does not discharge the obligation of an indorser
or accommodation party having a right of recourse against the
discharged party.
(c) If a person entitled to enforce an instrument agrees, with or
without consideration, to an extension of the due date of the
obligation of a party to pay the instrument, the extension discharges
an indorser or accommodation party having a right of recourse
against the party whose obligation is extended to the extent the
indorser or accommodation party proves that the extension caused loss
to the indorser or accommodation party with respect to the right of
recourse.
(d) If a person entitled to enforce an instrument agrees, with or
without consideration, to a material modification of the obligation
of a party other than an extension of the due date, the modification
discharges the obligation of an indorser or accommodation party
having a right of recourse against the person whose obligation is
modified to the extent the modification causes loss to the indorser
or accommodation party with respect to the right of recourse. The
loss suffered by the indorser or accommodation party as a result of
the modification is equal to the amount of the right of recourse
unless the person enforcing the instrument proves that no loss was
caused by the modification or that the loss caused by the
modification was an amount less than the amount of the right of
recourse.
(e) If the obligation of a party to pay an instrument is secured
by an interest in collateral and a person entitled to enforce the
instrument impairs the value of the interest in collateral, the
obligation of an indorser or accommodation party having a right of
recourse against the obligor is discharged to the extent of the
impairment. The value of an interest in collateral is impaired to the
extent (1) the value of the interest is reduced to an amount less
than the amount of the right of recourse of the party asserting
discharge, or (2) the reduction in value of the interest causes an
increase in the amount by which the amount of the right of recourse
exceeds the value of the interest. The burden of proving impairment
is on the party asserting discharge.
(f) If the obligation of a party is secured by an interest in
collateral not provided by an accommodation party and a person
entitled to enforce the instrument impairs the value of the interest
in collateral, the obligation of any party who is jointly and
severally liable with respect to the secured obligation is discharged
to the extent the impairment causes the party asserting discharge to
pay more than that party would have been obliged to pay, taking into
account rights of contribution, if impairment had not occurred. If
the party asserting discharge is an accommodation party not entitled
to discharge under subdivision (e), the party is deemed to have a
right to contribution based on joint and several liability rather
than a right to reimbursement. The burden of proving impairment is on
the party asserting discharge.
(g) Under subdivision (e) or (f), impairing value of an interest
in collateral includes (1) failure to obtain or maintain perfection
or recordation of the interest in collateral, (2) release of
collateral without substitution of collateral of equal value, (3)
failure to perform a duty to preserve the value of collateral owed,
under Division 9 (commencing with Section 9101) or other law, to a
debtor or surety or other person secondarily liable, or (4) failure
to comply with applicable law in disposing of collateral.
(h) An accommodation party is not discharged under subdivision
(c), (d), or (e) unless the person entitled to enforce the instrument
knows of the accommodation or has notice under subdivision (c) of
Section 3419 that the instrument was signed for accommodation.
(i) A party is not discharged under this section if (1) the party
asserting discharge consents to the event or conduct that is the
basis of the discharge, or (2) the instrument or a separate agreement
of the party provides for waiver of discharge under this section
either specifically or by general language indicating that parties
waive defenses based on suretyship or impairment of collateral.
3601. (a) The obligation of a party to pay the instrument is
discharged as stated in this division or by an act or agreement with
the party which would discharge an obligation to pay money under a
simple contract.
(b) 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.
3602. (a) Subject to subdivision (b), an instrument is paid to the
extent payment is made (1) by or on behalf of a party obliged to pay
the instrument, and (2) to a person entitled to enforce the
instrument. To the extent of the payment, the obligation of the party
obliged to pay the instrument is discharged even though payment is
made with knowledge of a claim to the instrument under Section 3306
by another person.
(b) The obligation of a party to pay the instrument is not
discharged under subdivision (a) if either of the following applies:
(1) A claim to the instrument under Section 3306 is enforceable
against the party receiving payment and (A) payment is made with
knowledge by the payor that payment is prohibited by injunction or
similar process of a court of competent jurisdiction, or (B) in the
case of an instrument other than a cashier's check, teller's check,
or certified check, the party making payment accepted, from the
person having a claim to the instrument, indemnity against loss
resulting from refusal to pay the person entitled to enforce the
instrument.
(2) The person making payment knows that the instrument is a
stolen instrument and pays a person it knows is in wrongful
possession of the instrument.
3603. (a) If tender of payment of an obligation to pay an
instrument is made to a person entitled to enforce the instrument,
the effect of tender is governed by principles of law applicable to
tender of payment under a simple contract.
(b) If tender of payment of an obligation to pay an instrument is
made to a person entitled to enforce the instrument and the tender is
refused, there is discharge, to the extent of the amount of the
tender, of the obligation of an indorser or accommodation party
having a right of recourse with respect to the obligation to which
the tender relates.
(c) If tender of payment of an amount due on an instrument is made
to a person entitled to enforce the instrument, the obligation of
the obligor to pay interest after the due date on the amount tendered
is discharged. If presentment is required with respect to an
instrument and the obligor is able and ready to pay on the due date
at every place of payment stated in the instrument, the obligor is
deemed to have made tender of payment on the due date to the person
entitled to enforce the instrument.
3604. (a) A person entitled to enforce an instrument, with or
without consideration, may discharge the obligation of a party to pay
the instrument (1) by an intentional voluntary act, such as
surrender of the instrument to the party, destruction, mutilation, or
cancellation of the instrument, cancellation or striking out of the
party's signature, or the addition of words to the instrument
indicating discharge, or (2) by agreeing not to sue or otherwise
renouncing rights against the party by a signed writing.
(b) Cancellation or striking out of an indorsement pursuant to
subdivision (a) does not affect the status and rights of a party
derived from the indorsement.
3605. (a) In this section, the term "indorser" includes a drawer
having the obligation described in subdivision (d) of Section 3414.
(b) Discharge, under Section 3604, of the obligation of a party to
pay an instrument does not discharge the obligation of an indorser
or accommodation party having a right of recourse against the
discharged party.
(c) If a person entitled to enforce an instrument agrees, with or
without consideration, to an extension of the due date of the
obligation of a party to pay the instrument, the extension discharges
an indorser or accommodation party having a right of recourse
against the party whose obligation is extended to the extent the
indorser or accommodation party proves that the extension caused loss
to the indorser or accommodation party with respect to the right of
recourse.
(d) If a person entitled to enforce an instrument agrees, with or
without consideration, to a material modification of the obligation
of a party other than an extension of the due date, the modification
discharges the obligation of an indorser or accommodation party
having a right of recourse against the person whose obligation is
modified to the extent the modification causes loss to the indorser
or accommodation party with respect to the right of recourse. The
loss suffered by the indorser or accommodation party as a result of
the modification is equal to the amount of the right of recourse
unless the person enforcing the instrument proves that no loss was
caused by the modification or that the loss caused by the
modification was an amount less than the amount of the right of
recourse.
(e) If the obligation of a party to pay an instrument is secured
by an interest in collateral and a person entitled to enforce the
instrument impairs the value of the interest in collateral, the
obligation of an indorser or accommodation party having a right of
recourse against the obligor is discharged to the extent of the
impairment. The value of an interest in collateral is impaired to the
extent (1) the value of the interest is reduced to an amount less
than the amount of the right of recourse of the party asserting
discharge, or (2) the reduction in value of the interest causes an
increase in the amount by which the amount of the right of recourse
exceeds the value of the interest. The burden of proving impairment
is on the party asserting discharge.
(f) If the obligation of a party is secured by an interest in
collateral not provided by an accommodation party and a person
entitled to enforce the instrument impairs the value of the interest
in collateral, the obligation of any party who is jointly and
severally liable with respect to the secured obligation is discharged
to the extent the impairment causes the party asserting discharge to
pay more than that party would have been obliged to pay, taking into
account rights of contribution, if impairment had not occurred. If
the party asserting discharge is an accommodation party not entitled
to discharge under subdivision (e), the party is deemed to have a
right to contribution based on joint and several liability rather
than a right to reimbursement. The burden of proving impairment is on
the party asserting discharge.
(g) Under subdivision (e) or (f), impairing value of an interest
in collateral includes (1) failure to obtain or maintain perfection
or recordation of the interest in collateral, (2) release of
collateral without substitution of collateral of equal value, (3)
failure to perform a duty to preserve the value of collateral owed,
under Division 9 (commencing with Section 9101) or other law, to a
debtor or surety or other person secondarily liable, or (4) failure
to comply with applicable law in disposing of collateral.
(h) An accommodation party is not discharged under subdivision
(c), (d), or (e) unless the person entitled to enforce the instrument
knows of the accommodation or has notice under subdivision (c) of
Section 3419 that the instrument was signed for accommodation.
(i) A party is not discharged under this section if (1) the party
asserting discharge consents to the event or conduct that is the
basis of the discharge, or (2) the instrument or a separate agreement
of the party provides for waiver of discharge under this section
either specifically or by general language indicating that parties
waive defenses based on suretyship or impairment of collateral.
3601. (a) The obligation of a party to pay the instrument is
discharged as stated in this division or by an act or agreement with
the party which would discharge an obligation to pay money under a
simple contract.
(b) 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.
3602. (a) Subject to subdivision (b), an instrument is paid to the
extent payment is made (1) by or on behalf of a party obliged to pay
the instrument, and (2) to a person entitled to enforce the
instrument. To the extent of the payment, the obligation of the party
obliged to pay the instrument is discharged even though payment is
made with knowledge of a claim to the instrument under Section 3306
by another person.
(b) The obligation of a party to pay the instrument is not
discharged under subdivision (a) if either of the following applies:
(1) A claim to the instrument under Section 3306 is enforceable
against the party receiving payment and (A) payment is made with
knowledge by the payor that payment is prohibited by injunction or
similar process of a court of competent jurisdiction, or (B) in the
case of an instrument other than a cashier's check, teller's check,
or certified check, the party making payment accepted, from the
person having a claim to the instrument, indemnity against loss
resulting from refusal to pay the person entitled to enforce the
instrument.
(2) The person making payment knows that the instrument is a
stolen instrument and pays a person it knows is in wrongful
possession of the instrument.
3603. (a) If tender of payment of an obligation to pay an
instrument is made to a person entitled to enforce the instrument,
the effect of tender is governed by principles of law applicable to
tender of payment under a simple contract.
(b) If tender of payment of an obligation to pay an instrument is
made to a person entitled to enforce the instrument and the tender is
refused, there is discharge, to the extent of the amount of the
tender, of the obligation of an indorser or accommodation party
having a right of recourse with respect to the obligation to which
the tender relates.
(c) If tender of payment of an amount due on an instrument is made
to a person entitled to enforce the instrument, the obligation of
the obligor to pay interest after the due date on the amount tendered
is discharged. If presentment is required with respect to an
instrument and the obligor is able and ready to pay on the due date
at every place of payment stated in the instrument, the obligor is
deemed to have made tender of payment on the due date to the person
entitled to enforce the instrument.
3604. (a) A person entitled to enforce an instrument, with or
without consideration, may discharge the obligation of a party to pay
the instrument (1) by an intentional voluntary act, such as
surrender of the instrument to the party, destruction, mutilation, or
cancellation of the instrument, cancellation or striking out of the
party's signature, or the addition of words to the instrument
indicating discharge, or (2) by agreeing not to sue or otherwise
renouncing rights against the party by a signed writing.
(b) Cancellation or striking out of an indorsement pursuant to
subdivision (a) does not affect the status and rights of a party
derived from the indorsement.
3605. (a) In this section, the term "indorser" includes a drawer
having the obligation described in subdivision (d) of Section 3414.
(b) Discharge, under Section 3604, of the obligation of a party to
pay an instrument does not discharge the obligation of an indorser
or accommodation party having a right of recourse against the
discharged party.
(c) If a person entitled to enforce an instrument agrees, with or
without consideration, to an extension of the due date of the
obligation of a party to pay the instrument, the extension discharges
an indorser or accommodation party having a right of recourse
against the party whose obligation is extended to the extent the
indorser or accommodation party proves that the extension caused loss
to the indorser or accommodation party with respect to the right of
recourse.
(d) If a person entitled to enforce an instrument agrees, with or
without consideration, to a material modification of the obligation
of a party other than an extension of the due date, the modification
discharges the obligation of an indorser or accommodation party
having a right of recourse against the person whose obligation is
modified to the extent the modification causes loss to the indorser
or accommodation party with respect to the right of recourse. The
loss suffered by the indorser or accommodation party as a result of
the modification is equal to the amount of the right of recourse
unless the person enforcing the instrument proves that no loss was
caused by the modification or that the loss caused by the
modification was an amount less than the amount of the right of
recourse.
(e) If the obligation of a party to pay an instrument is secured
by an interest in collateral and a person entitled to enforce the
instrument impairs the value of the interest in collateral, the
obligation of an indorser or accommodation party having a right of
recourse against the obligor is discharged to the extent of the
impairment. The value of an interest in collateral is impaired to the
extent (1) the value of the interest is reduced to an amount less
than the amount of the right of recourse of the party asserting
discharge, or (2) the reduction in value of the interest causes an
increase in the amount by which the amount of the right of recourse
exceeds the value of the interest. The burden of proving impairment
is on the party asserting discharge.
(f) If the obligation of a party is secured by an interest in
collateral not provided by an accommodation party and a person
entitled to enforce the instrument impairs the value of the interest
in collateral, the obligation of any party who is jointly and
severally liable with respect to the secured obligation is discharged
to the extent the impairment causes the party asserting discharge to
pay more than that party would have been obliged to pay, taking into
account rights of contribution, if impairment had not occurred. If
the party asserting discharge is an accommodation party not entitled
to discharge under subdivision (e), the party is deemed to have a
right to contribution based on joint and several liability rather
than a right to reimbursement. The burden of proving impairment is on
the party asserting discharge.
(g) Under subdivision (e) or (f), impairing value of an interest
in collateral includes (1) failure to obtain or maintain perfection
or recordation of the interest in collateral, (2) release of
collateral without substitution of collateral of equal value, (3)
failure to perform a duty to preserve the value of collateral owed,
under Division 9 (commencing with Section 9101) or other law, to a
debtor or surety or other person secondarily liable, or (4) failure
to comply with applicable law in disposing of collateral.
(h) An accommodation party is not discharged under subdivision
(c), (d), or (e) unless the person entitled to enforce the instrument
knows of the accommodation or has notice under subdivision (c) of
Section 3419 that the instrument was signed for accommodation.
(i) A party is not discharged under this section if (1) the party
asserting discharge consents to the event or conduct that is the
basis of the discharge, or (2) the instrument or a separate agreement
of the party provides for waiver of discharge under this section
either specifically or by general language indicating that parties
waive defenses based on suretyship or impairment of collateral.
