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Can you summarize MGL Chapter 106, Article 3?
UNIFORM COMMERCIAL CODE > NEGOTIABLE INSTRUMENTS
Short Summary
This section of the Massachusetts General Law, specifically under the Uniform Commercial Code - Negotiable Instruments, addresses the discharge of indorsers and accommodation parties in relation to the payment of negotiable instruments. It clarifies that the discharge of the obligation of a party to pay an instrument does not discharge the obligation of an indorser or accommodation party with a right of recourse against the discharged party. The section also outlines the circumstances under which an extension of the due date or a material modification of the obligation can discharge the indorser or accommodation party, provided that it causes a loss to them. Additionally, it explains that impairing the value of collateral can also discharge the obligation of an indorser or accommodation party. The burden of proving impairment is on the party asserting discharge. The section further specifies that an accommodation party is not discharged unless the person entitled to enforce the instrument knows of the accommodation or has notice of it. Finally, it states that parties can consent to events or conduct that would otherwise discharge them, and waivers of discharge can be included in the instrument or a separate agreement.
Whom does it apply to?
Parties involved in the payment and negotiation of negotiable instruments.
What does it govern?
The discharge of indorsers and accommodation parties in relation to the payment of negotiable instruments.
What are exemptions?
No specific exemptions are mentioned.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
Massachusetts