Nebraska Uniform Commercial Code 3-601

UCC 3-601

3-601.

Discharge and effect of discharge.

(a) 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.

(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.

Source

  • Laws 1991, LB 161, § 67.

Annotations

  • For purposes of subsection (1) of former section 3-601, a setoff is a means of satisfaction of a debt. Harmon Cable Communications v. Scope Cable Television, 237 Neb. 871, 468 N.W.2d 350 (1991).

  • Subsection (2) of former section 3-601 is a "catchall" provision which does not come into play if a debt is discharged by some means encompassed in subsection (1) of this section. Harmon Cable Communications v. Scope Cable Television, 237 Neb. 871, 468 N.W.2d 350 (1991).

  • COMMENT

  • Subsection (a) replaces subsections (1) and (2) of former section 3-601. Subsection (b) restates former section 3-602. Notice of discharge is not treated as notice of a defense that prevents holder-in-due-course status. Section 3-302(b). Discharge is effective against a holder in due course only if the holder had notice of the discharge when holder-in-due-course status was acquired. For example, if an instrument bearing a canceled indorsement is taken by a holder, the holder has notice that the indorser has been discharged. Thus, the discharge is effective against the holder even if the holder is a holder in due course.