§ 10:3-310 — Effect of instrument on obligation for which taken

Louisiana § 10:3-310

• Jurisdiction: Louisiana
• Title 10: Commercial Laws

Text

§3-310. Effect of instrument on obligation for which taken
(a) Unless otherwise agreed, if a certified check, cashier's check, or teller's
check is taken for an obligation, the obligation is discharged to the same extent
discharge would result if an amount of money equal to the amount of the instrument
were taken in payment of the obligation. Discharge of the obligation does not affect
any liability that the obligor may have as an indorser of the instrument.
(b) Unless otherwise agreed and except as provided in Subsection (a), if a
note or an uncertified check is taken for an obligation, the obligation is suspended to
the same extent the obligation would be discharged if an amount of money equal to
the amount of the instrument were taken, and the following rules apply:
(1) In the case of an uncertified check, suspension of the obligation continues
until dishonor of the check or until it is paid or certified. Payment or certification of
the check results in discharge of the obligation to the extent of the amount of the
check.
(2) In the case of a note, suspension of the obligation continues until
dishonor of the note or until it is paid. Payment of the note results in discharge of the
obligation to the extent of the payment.
(3) Except as provided in Paragraph (4), if the check or note is dishonored
and the obligee of the obligation for which the instrument was taken is the person
entitled to enforce the instrument, the obligee may enforce either the instrument or
the obligation. In the case of an instrument of a third person which is negotiated to
the obligee by the obligor, discharge of the obligor on the instrument also discharges
the obligation.
(4) If the person entitled to enforce the instrument taken for an obligation is
a person other than the obligee, the obligee may not enforce the obligation to the
extent the obligation is suspended. If the obligee is the person entitled to enforce the
instrument but no longer has possession of it because it was lost, stolen, or destroyed,
the obligation may not be enforced to the extent of the amount payable on the
instrument, and to that extent the obligee's rights against the obligor are limited to
enforcement of the instrument.
(c) If an instrument other than one described in Subsection (a) or (b) is taken
for an obligation, the effect is (i) that stated in Subsection (a) if the instrument is one
on which a bank is liable as maker or acceptor, or (ii) that stated in Subsection (b) in
any other case.

Legislative History

Acts 1992, No. 1133, §3, eff. July 1, 1993; Acts 1993, No. 948, §10, eff. Jan. 1, 1994.