§ 34.1-3-305 — Defenses and claims in recoupment

Wyoming § 34.1-3-305

• Jurisdiction: Wyoming
• Title 34.1: Uniform Commercial Code
• Art. 3: NEGOTIABLE INSTRUMENTS

Text

(a) Except as stated in subsection (b), the right to
enforce the obligation of a party to pay an instrument is
subject to the following:
(i) A defense of the obligor based on (1) infancy of
the obligor to the extent it is a defense to a simple contract,
(2) duress, lack of legal capacity, or illegality of the
transaction which, under other law, nullifies the obligation of
the obligor, (3) fraud that induced the obligor to sign the
instrument with neither knowledge nor reasonable opportunity to
learn of its character or its essential terms, or (4) discharge
of the obligor in insolvency proceedings;
(ii) A defense of the obligor stated in another
section of this article or a defense of the obligor that would
be available if the person entitled to enforce the instrument
were enforcing a right to payment under a simple contract; and
(iii) A claim in recoupment of the obligor against
the original payee of the instrument if the claim arose from the
transaction that gave rise to the instrument; but the claim of
the obligor may be asserted against a transferee of the
instrument only to reduce the amount owing on the instrument at
the time the action is brought.
(b) The right of a holder in due course to enforce the
obligation of a party to pay the instrument is subject to
defenses of the obligor stated in subsection (a)(i), but is not
subject to defenses of the obligor stated in subsection (a)(ii)
or claims in recoupment stated in subsection (a)(iii) against a
person other than the holder.
(c) Except as stated in subsection (d), in an action to
enforce the obligation of a party to pay the instrument, the
obligor may not assert against the person entitled to enforce
the instrument a defense, claim in recoupment, or claim to the
instrument (section 34.1-3-306) of another person, but the other
person's claim to the instrument may be asserted by the obligor
if the other person is joined in the action and personally
asserts the claim against the person entitled to enforce the
instrument. An obligor is not obliged to pay the instrument if
the person seeking enforcement of the instrument does not have
rights of a holder in due course and the obligor proves that the
instrument is a lost or stolen instrument.
(d) In an action to enforce the obligation of an
accommodation party to pay an instrument, the accommodation
party may assert against the person entitled to enforce the
instrument any defense or claim in recoupment under subsection
(a) that the accommodated party could assert against the person
entitled to enforce the instrument, except the defenses of
discharge in insolvency proceedings, infancy, and lack of legal
capacity.