{"data":{"id":"us-nm/55-3-601","jurisdiction":"us-nm","citation":"55-3-601","heading":"Discharge and effect of discharge.","body":"(a) 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.\n(b) Discharge of the obligation of a party is not effective against a person acquiring rights of a holder in due course of the instrument without notice of the discharge.\nOFFICIAL COMMENTS\nUCC Official Comments © by ALI \u0026 the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.\nSubsection (a) replaces subsections (1) and (2) of former Section 3-601. Subsection (b) restates former Section 3-602 [see now 55-3-601 NMSA 1978]. Notice of discharge is not treated as notice of a defense that prevents holder in due course status. Section 3-302(b) [55-3-302 NMSA 1978]. Discharge is effective against a holder in due course only if the holder had notice of the discharge when holder in due course status was acquired. For example, if an instrument bearing a canceled indorsement is taken by a holder, the holder has notice that the indorser has been discharged. Thus, the discharge is effective against the holder even if the holder is a holder in due course.","path":["Chapter 55 - Uniform Commercial Code","ARTICLE 3 Negotiable Instruments"],"source_url":"https://nmonesource.com/nmos/nmsa-unanno/en/item/18558/index.do","current_through":"2024-04-27","vintage":"","retrieved_at":"2026-09-03T15:02:20Z","sha256":"0914a3f256e658a53ed437ae5c5e7f2308c6113f591c32b4a90933b6247aab5c","source_id":"us-nm","stale":false,"prev":"us-nm/55-3-506","next":"us-nm/55-3-602"},"notice":"GroundRules: Original legal text. Not legal advice."}