- Alaska Statutes.
- Title 45. Trade and Commerce
- Chapter 3. Negotiable Instruments
- Section 305. Defenses and Claims in Recoupment.
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. Overdue Instrument.
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. Claims to An Instrument.
AS 45.03.305. Defenses and Claims in Recoupment.
- (a) Except as stated in (b) of this section, the right to enforce the obligation of a party to pay an instrument is
subject to the following:
- (1) a defense of the obligor based on
- (A) infancy of the obligor, to the extent it is a defense to a simple contract;
- (B) duress, lack of legal capacity, or illegality of the transaction that, under other law, nullifies the obligation of
- (C) 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
- (D) discharge of the obligor in insolvency proceedings;
- (2) a defense of the obligor stated in another section of this chapter 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
- (3) 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 in 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 (a)(1) of this section, but is not subject to defenses of the obligor stated in (a)(2) of this
section or claims in recoupment stated in (a)(3) of this section against a person other than the holder.
- (c) Except as stated in (d) of this section, 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 under AS 45.03.306
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 (a) of this
section 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.
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