1.In this section, the term “endorser” includes a drawer having the obligation described
in section 554.3414, subsection 4.
2.Discharge, under section 554.3604, of the obligation of a party to pay an instrument
does not discharge the obligation of an endorser or accommodation party having a right of
recourse against the discharged party.
3.If a person entitled to enforce an instrument agrees, with or without consideration, to
an extension of the due date of the obligation of a party to pay the instrument, the extension
discharges an endorser or accommodation party having a right of recourse against the party
whose obligation is extended to the extent the endorser or accommodation party proves that
the extension caused loss to the endorser or accommodation party with respect to the right
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1. In this section, the term “endorser” includes a drawer having the obligation described
in section 554.3414, subsection 4.
2. Discharge, under section 554.3604, of the obligation of a party to pay an instrument
does not discharge the obligation of an endorser or accommodation party having a right of
recourse against the discharged party.
3. If a person entitled to enforce an instrument agrees, with or without consideration, to
an extension of the due date of the obligation of a party to pay the instrument, the extension
discharges an endorser or accommodation party having a right of recourse against the party
whose obligation is extended to the extent the endorser or accommodation party proves that
the extension caused loss to the endorser or accommodation party with respect to the right
of recourse.
4. If a person entitled to enforce an instrument agrees, with or without consideration, to a
material modification of the obligation of a party other than an extension of the due date, the
modification discharges the obligation of an endorser or accommodation party having a right
of recourse against the person whose obligation is modified to the extent the modification
causes loss to the endorser or accommodation party with respect to the right of recourse. The
loss suffered by the endorser or accommodation party as a result of the modification is equal
to the amount of the right of recourse unless the person enforcing the instrument proves that
no loss was caused by the modification or that the loss caused by the modification was an
amount less than the amount of the right of recourse.
5. If the obligation of a party to pay an instrument is secured by an interest in collateral
and a person entitled to enforce the instrument impairs the value of the interest in collateral,
the obligation of an endorser or accommodation party having a right of recourse against the
obligor is discharged to the extent of the impairment. The value of an interest in collateral is
impairedtotheextentthevalueoftheinterestisreducedtoanamountlessthantheamountof
the right of recourse of the party asserting discharge, or the reduction in value of the interest
causes an increase in the amount by which the amount of the right of recourse exceeds the
value of the interest. The burden of proving impairment is on the party asserting discharge.
6. If the obligation of a party is secured by an interest in collateral not provided by an
accommodation party and a person entitled to enforce the instrument impairs the value of
the interest in collateral, the obligation of any party who is jointly and severally liable with
respect to the secured obligation is discharged to the extent the impairment causes the party
asserting discharge to pay more than that party would have been obliged to pay, taking
into account rights of contribution, if impairment had not occurred. If the party asserting
discharge is an accommodation party not entitled to discharge under subsection 5, the party
isdeemedtohavearighttocontributionbasedonjointandseveralliabilityratherthanaright
to reimbursement. The burden of proving impairment is on the party asserting discharge.
7. Under subsection 5 or 6, impairing value of an interest in collateral includes failure to
obtain or maintain perfection or recordation of the interest in collateral; release of collateral
without substitution of collateral of equal value; failure to perform a duty to preserve the
value of collateral owed, under Article 9 or other law, to a debtor or surety or other person
secondarily liable; or failure to comply with applicable law in disposing of collateral.
8. Anaccommodationpartyisnotdischargedundersubsection3, 4, or5unlesstheperson
entitled to enforce the instrument knows of the accommodation or has notice under section
554.3419, subsection 3, that the instrument was signed for accommodation.
9. A party is not discharged under this section if the party asserting discharge consents
to the event or conduct that is the basis of the discharge, or the instrument or a separate
agreement of the party provides for waiver of discharge under this section either specifically
or by general language indicating that parties waive defenses based on suretyship or
impairment of collateral.