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Payment of Negotiable Instruments

Learn how to tell whether and when an instrument was paid, along with the effect of payment.


Under Article 3, an instrument is considered paid when someone obligated to pay the instrument makes payment to someone entitled to enforce the instrument. Generally, payment results in the discharge of the payor’s obligation.

Of course, these rules have some nuances, which we’ll discuss in this lesson

I. Payment

The general rule under Article 3 is that an instrument is paid to the extent that payment is made to a person entitled to enforce the instrument by or on behalf of someone obligated to...