Also known as: surrendering the instrument · surrendered the instrument · instrument surrender
Written by attorneys · grounded in primary & secondary sources — see below
An intentional voluntary act by which a person entitled to enforce a negotiable instrument discharges the obligation of a party to pay the instrument. The act must demonstrate clear intent to release the obligor and may occur with or without consideration.
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Stella Shapiro holds a promissory note executed by Simon Stern. After receiving full payment, Stella intentionally hands the original note back to Simon at his office. Simon later faces a demand for payment from a subsequent claimant, but the surrender prevents enforcement against him.
Serena Soto pays off a loan secured by a note held by Sterling Manufacturing. The bank returns the original note marked paid and delivers it to Serena. When Sterling later attempts collection through an assignee, the prior surrender blocks any recovery on the instrument.
No. The person entitled to enforce the instrument may discharge the obligation by surrender even without receiving consideration in return.
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The surrender must be an intentional voluntary act that clearly demonstrates the intent to discharge the party obligated to pay.
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No. Destruction of a check solely in connection with extracting information and creating an image for payment does not discharge the obligation of the party to pay.
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