KRS 355.3-604: Discharge by cancellation or renunciation.

(1) (a) A person entitled to enforce an instrument, with or without consideration, may

discharge the obligation of a party to pay the instrument:

1. By an intentional voluntary act, such as surrender of the instrument to

the party, destruction, mutilation, or canc ellation of the instrument,

cancellation or striking out of the party's signature, or the addition of

words to the instrument indicating discharge; or

2. By agreeing not to sue or otherwise renouncing rights against the party

by a signed record.

(b) The obligation of a party to pay the instrument is not discharged solely by the

destruction of a check in connection with a process in which information is

extracted from the check and an image of the check is made and,

subsequently, the information and image are transmitted for payment.

(2) Cancellation or striking out of an indorsement pursuant to subsection (1) of this

section does not affect the status and rights of a party derived from the indorsement.