Ch. 91                                      1996 LAWS OF MARYLAND

SUBTITLE 6. DISCHARGE AND PAYMENT.
3-601.

(A)    THE OBLIGATION OF A PARTY TO PAY THE INSTRUMENT IS DISCHARGED
AS STATED IN THIS TITLE OR BY AN ACT OR AGREEMENT WITH THE PARTY WHICH
WOULD DISCHARGE AN OBLIGATION TO PAY MONEY UNDER A SIMPLE CONTRACT.

(B)     DISCHARGE OF THE OBLIGATION OF A PARTY IS NOT EFFECTIVE
AGAINST A PERSON ACQUIRING RIGHTS OF A HOLDER IN DUE COURSE OF THE
INSTRUMENT WITHOUT NOTICE OF THE DISCHARGE

3-602.

(A)    SUBJECT TO SUBSECTION (B), AN INSTRUMENT IS PAID TO THE EXTENT
PAYMENT IS MADE (I) BY OR ON BEHALF OF A PARTY OBLIGED TO PAY THE
INSTRUMENT, AND (II) TO A PERSON ENTITLED TO ENFORCE THE INSTRUMENT. TO
THE EXTENT OF THE PAYMENT, THE OBLIGATION OF THE PARTY OBLIGED TO PAY
THE INSTRUMENT IS DISCHARGED EVEN THOUGH PAYMENT IS MADE WITH
KNOWLEDGE OF A CLAIM TO THE INSTRUMENT UNDER § 3-306 BY ANOTHER
PERSON.

(B)     THE OBLIGATION OF A PARTY TO PAY THE INSTRUMENT IS NOT
DISCHARGED UNDER SUBSECTION (A) IF:

(1)     A CLAIM TO THE INSTRUMENT UNDER § 3-306 IS ENFORCEABLE
AGAINST THE PARTY RECEIVING PAYMENT AND (I) PAYMENT IS MADE WITH
KNOWLEDGE BY THE PAYOR THAT PAYMENT IS PROHIBITED BY INJUNCTION OR
SIMILAR PROCESS OF A COURT OF COMPETENT JURISDICTION, OR (II) IN THE CASE
OF AN INSTRUMENT OTHER THAN A CASHIER'S CHECK, TELLER'S CHECK, OR
CERTIFIED CHECK, THE PARTY MAKING PAYMENT ACCEPTED, FROM THE PERSON
HAVING A CLAIM TO THE INSTRUMENT, INDEMNITY AGAINST LOSS RESULTING
FROM REFUSAL TO PAY THE PERSON ENTITLED TO ENFORCE THE INSTRUMENT; OR

(2)     THE PERSON MAKING PAYMENT KNOWS THAT THE INSTRUMENT IS
A STOLEN INSTRUMENT AND PAYS A PERSON IT KNOWS IS IN WRONGFUL
POSSESSION OF THE INSTRUMENT.

3-603.

(A)    IF TENDER OF PAYMENT OF AN OBLIGATION TO PAY AN INSTRUMENT IS
MADE TO A PERSON ENTITLED TO ENFORCE THE INSTRUMENT, THE EFFECT OF
TENDER IS GOVERNED BY PRINCIPLES OF LAW APPLICABLE TO TENDER OF
PAYMENT UNDER A SIMPLE CONTRACT.

(B)     IF TENDER OF PAYMENT OF AN OBLIGATION TO PAY AN INSTRUMENT IS
MADE TO A PERSON ENTITLED TO ENFORCE THE INSTRUMENT AND THE TENDER IS
REFUSED, THERE IS DISCHARGE, TO THE EXTENT OF THE AMOUNT OF THE TENDER,
OF THE OBLIGATION OF AN INDORSER OR ACCOMMODATION PARTY HAVING A
RIGHT OF RECOURSE WITH RESPECT TO THE OBLIGATION TO WHICH THE TENDER
RELATES.

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