In several other lessons, we mentioned the discharge of a party’s obligations on an instrument. In this lesson, we will expand on the concept of discharge and its effect under Article 3.

I. Discharge

The term discharge refers to the release or satisfaction of an obligation on a negotiable instrument. Under Article 3, a party’s obligation on an instrument is discharged to the extent specified in Article 3 itself or by any act or agreement that would discharge a monetary obligation under an...