7-3-419
Section 7-3-419 Instruments signed for accommodation. (a) If an instrument is issued for value
given for the benefit of a party to the instrument ("accommodated party") and another
party to the instrument ("accommodation party") signs the instrument for the purpose
of incurring liability on the instrument without being a direct beneficiary of the value given
for the instrument, the instrument is signed by the accommodation party "for accommodation."
(b) An accommodation party may sign the instrument as maker, drawer, acceptor, or indorser
and, subject to subsection (d), is obliged to pay the instrument in the capacity in which
the accommodation party signs. The obligation of an accommodation party may be enforced notwithstanding
any statute of frauds and whether or not the accommodation party receives consideration for
the accommodation. (c) A person signing an instrument is presumed to be an accommodation party
and there is notice that the instrument is signed for accommodation if the...
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7-3-305
Section 7-3-305 Defenses and claims in recoupment. (a) Except as stated in subsection (b),
the right to enforce the obligation of a party to pay an instrument is subject to the following:
(1) A defense of the obligor based on (i) infancy of the obligor to the extent it is a defense
to a simple contract, (ii) duress, lack of legal capacity, or illegality of the transaction
which, under other law, nullifies the obligation of the obligor, (iii) fraud that induced
the obligor to sign the instrument with neither knowledge nor reasonable opportunity to learn
of its character or its essential terms, or (iv) discharge of the obligor in insolvency proceedings;
(2) A defense of the obligor stated in another section of this article or a defense of the
obligor that would be available if the person entitled to enforce the instrument were enforcing
a right to payment under a simple contract; and (3) A claim in recoupment of the obligor against
the original payee of the instrument if the claim arose...
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7-3-605
Section 7-3-605 Discharge of indorsers and accommodation parties. (a) In this section, the
term "indorser" includes a drawer having the obligation described in Section 7-3-414(d).
(b) Discharge, under Section 7-3-604, 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...
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7-3-103
Section 7-3-103 Definitions. (a) In this article: (1) "Acceptor" means a drawee who
has accepted a draft. (2) "Drawee" means a person ordered in a draft to make payment.
(3) "Drawer" means a person who signs or is identified in a draft as a person ordering
payment. (4) "Good faith" means honesty in fact in the conduct or transaction concerned.
(5) "Maker" means a person who signs or is identified in a note as a person undertaking
to pay. (6) "Order" means a written instruction to pay money signed by the person
giving the instruction. The instruction may be addressed to any person, including the person
giving the instruction, or to one or more persons jointly or in the alternative but not in
succession. An authorization to pay is not an order unless the person authorized to pay is
also instructed to pay. (7) "Ordinary care" in the case of a person engaged in business
means observance of reasonable commercial standards, prevailing in the area in which the person
is located, with respect...
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7-3-603
Section 7-3-603 Tender of payment. (a) If tender of payment of an amount due on 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 and by subsections
(b), (c) and (d). (b) If tender of payment of an amount due on 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...
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7-3-602
Section 7-3-602 Payment. (a) Subject to subsection (b), an instrument is paid to the extent
payment is made (i) by or on behalf of a party obliged to pay the instrument, and (ii) 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 7-3-306 by another person. (b) The obligation
of a party to pay the instrument is not discharged under subsection (a) if: (1) A claim to
the instrument under Section 7-3-306 is enforceable against the party receiving payment and
(i) payment is made with knowledge by the payor that payment is prohibited by injunction or
similar process of a court of competent jurisdiction, or (ii) 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...
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7-3-604
Section 7-3-604 Discharge by cancellation or renunciation. (a) A person entitled to enforce
an instrument, with or without consideration, may discharge the obligation of a party to pay
the instrument (i) 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 (ii) 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 subsection (a) does
not affect the status and rights of a party derived from the indorsement. (Acts 1995, No.
95-668, p. 1381, §1.)...
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7-3-417
Section 7-3-417 Presentment warranties. (a) If an unaccepted draft is presented to the drawee
for payment or acceptance and the drawee pays or accepts the draft, (i) the person obtaining
payment or acceptance, at the time of presentment, and (ii) a previous transferor of the draft,
at the time of transfer, warrant to the drawee making payment or accepting the draft in good
faith that: (1) The warrantor is, or was, at the time the warrantor transferred the draft,
a person entitled to enforce the draft or authorized to obtain payment or acceptance of the
draft on behalf of a person entitled to enforce the draft; (2) The draft has not been altered;
and (3) The warrantor has no knowledge that the signature of the drawer of the draft is unauthorized.
(b) A drawee making payment may recover from any warrantor damages for breach of warranty
equal to the amount paid by the drawee less the amount the drawee received or is entitled
to receive from the drawer because of the payment. In addition,...
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7-3-302
Section 7-3-302 Holder in due course. (a) Subject to subsection (c) and Section 7-3-106(d),
"holder in due course" means the holder of an instrument if: (1) The instrument
when issued or negotiated to the holder does not bear such apparent evidence of forgery or
alteration or is not otherwise so irregular or incomplete as to call into question its authenticity;
and (2) The holder took the instrument (i) for value, (ii) in good faith, (iii) without notice
that the instrument is overdue or has been dishonored or that there is an uncured default
with respect to payment of another instrument issued as part of the same series, (iv) without
notice that the instrument contains an unauthorized signature or has been altered, (v) without
notice of any claim to the instrument described in Section 7-3-306, and (vi) without notice
that any party has a defense or claim in recoupment described in Section 7-3-305(a). (b) Notice
of discharge of a party, other than discharge in an insolvency proceeding,...
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7-9A-102
Section 7-9A-102 Definitions and index of definitions. (a) Article 9A definitions. In this
article: (1) "Accession" means goods that are physically united with other goods
in such a manner that the identity of the original goods is not lost. (2) "Account,"
except as used in "account for," means a right to payment of a monetary obligation,
whether or not earned by performance, (i) for property that has been or is to be sold, leased,
licensed, assigned, or otherwise disposed of, (ii) for services rendered or to be rendered,
(iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred
or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of
a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge
card or information contained on or for use with the card, or (viii) as winnings in a lottery
or other game of chance operated or sponsored by a State, governmental unit of a State, or...

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