New York Uniform Commercial Code Law Section 3-606 - Impairment of Recourse or of Collateral.

Section 3--606. Impairment of Recourse or of Collateral.

(1)  The  holder  discharges any party to the instrument to the extent
  that without such party's consent the holder

     (a) without express reservation of rights releases or agrees  not

         to sue any person against whom the party has to the knowledge

         of  the  holder  a right of recourse or agrees to suspend the

         right to  enforce  against  such  person  the  instrument  or

         collateral  or  otherwise discharges such person, except that

         failure or  delay  in  effecting  any  required  presentment,

         protest or notice of dishonor with respect to any such person

         does  not discharge any party as to whom presentment, protest

         or notice of dishonor is effective or unnecessary; or

     (b) unjustifiably impairs any collateral for the instrument given

         by or on behalf of the party or any person  against  whom  he

         has a right of recourse.

(2)  By  express reservation of rights against a party with a right of
  recourse the holder preserves

     (a) all his rights against such party as of  the  time  when  the

         instrument was originally due; and

     (b) the right of the party to pay the instrument as of that time;

         and

     (c) all rights of such party to recourse against others.

Last modified: February 3, 2019