Discharge of indorser's liability: holder's unilateral impairment of remedy releases indorsers as if instrument were paid. Where a holder of a negotiable instrument, without the indorser's consent, destroys or impairs the indorser's remedy against a prior party, the indorser is discharged from liability to the holder to the same extent as if the instrument had been paid at maturity. This covers unilateral acts by the holder that remove or weaken the indorser's ability to pursue antecedent parties and thereby excuse the indorser from corresponding liability.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Discharge of indorser's liability: holder's unilateral impairment of remedy releases indorsers as if instrument were paid.
Where a holder of a negotiable instrument, without the indorser's consent, destroys or impairs the indorser's remedy against a prior party, the indorser is discharged from liability to the holder to the same extent as if the instrument had been paid at maturity. This covers unilateral acts by the holder that remove or weaken the indorser's ability to pursue antecedent parties and thereby excuse the indorser from corresponding liability.
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