§ 6A-3-310 - Effect of instrument on obligation for which taken.
SECTION 6A-3-310
§ 6A-3-310 Effect of instrument onobligation for which taken. – (a) Unless otherwise agreed, if a certified check, cashier's check, or teller'scheck is taken for an obligation, the obligation is discharged to the sameextent discharge would result if an amount of money equal to the amount of theinstrument were taken in payment of the obligation. Discharge of the obligationdoes not affect any liability that the obligor may have as an indorser of theinstrument.
(b) Unless otherwise agreed and except as provided insubsection (a), if a note or an uncertified check is taken for an obligation,the obligation is suspended to the same extent the obligation would bedischarged if an amount of money equal to the amount of the instrument weretaken, and the following rules apply:
(1) In the case of an uncertified check, suspension of theobligation continues until dishonor of the check or until it is paid orcertified. Payment or certification of the check results in discharge of theobligation to the extent of the amount of the check.
(2) In the case of a note, suspension of the obligationcontinues until dishonor of the note or until it is paid. Payment of the noteresults in discharge of the obligation to the extent of the payment.
(3) Except as provided in paragraph (4), if the check or noteis dishonored and the obligee of the obligation for which the instrument wastaken is the person entitled to enforce the instrument, the obligee may enforceeither the instrument or the obligation. In the case of an instrument of athird person which is negotiated to the obligee by the obligor, discharge ofthe obligor on the instrument also discharges the obligation.
(4) If the person entitled to enforce the instrument takenfor an obligation is a person other than the obligee, the obligee may notenforce the obligation to the extent the obligation is suspended. If theobligee is the person entitled to enforce the instrument but no longer haspossession of it because it was lost, stolen, or destroyed, the obligation maynot be enforced to the extent of the amount payable on the instrument, and tothat extent the obligee's rights against the obligor are limited to enforcementof the instrument.
(c) If an instrument other than one described in subsection(a) or (b) is taken for an obligation, the effect is (i) that stated insubsection (a) if the instrument is one on which a bank is liable as maker oracceptor, or (ii) that stated in subsection (b) in any other case.