Which of the following actions by the holder causes an impairment of the right of recourse?
A) releasing an obligor party from liability
B) withholding collateral that would benefit that party
C) writing "canceled" on the face of the instrument
D) destruction of the instrument with the intent of eliminating the obligation

Question

Quizplus · Accepted Answer

Releasing an obligor party from liability means that the holder has given up their right to recourse against that party, which impairs their ability to collect damages from them.

Which of the Following Actions by the Holder Causes an Impairment