New York Uniform Commercial Code Law Section 3-802 - Effect of Instrument on Obligation for Which It Is Given.

Section 3--802. Effect  of  Instrument  on  Obligation  for  Which It Is
                Given.
(1) Unless otherwise agreed  where  an  instrument  is  taken  for  an
  underlying obligation
     (a) the  obligation  is pro tanto discharged if a bank is drawer,
         maker or acceptor of the instrument and there is no  recourse
         on the instrument against the underlying obligor; and
     (b) in any other case the obligation is suspended pro tanto until
         the instrument is due or if it is payable on demand until its
         presentment.  If  the  instrument is dishonored action may be
         maintained  on  either  the  instrument  or  the  obligation;
         discharge  of  the  underlying obligor on the instrument also
         discharges him on the obligation.
(2) The taking in good faith of a check which is  not  postdated  does
  not  of  itself  so  extend  the  time  on the original obligation as to
  discharge a surety.

Last modified: February 3, 2019