KRS 355.3-601: Discharge and effect of dishonor.

(1) 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.

(2) Discharge of the obligation of a party is not eff ective against a person acquiring

rights of a holder in due course of the instrument without notice of the discharge.