Idaho State Statutes - Idaho Attorney Directory

(1) Except as stated in
subsection (2) of this section, the right to enforce the obligation of a party
to pay an instrument is subject to the following:
(a) A defense of the obligor based on (i) infancy of the obligor to the
extent it is a defense to a simple contract, (ii) duress, lack of legal
capacity or illegality of the transaction which, under other law,
nullifies the obligation of the obligor, (iii) 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 (iv)
discharge of the obligor in insolvency proceedings;
(b) 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
(c) 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 on the
instrument at the time the action is brought.
(2) 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
subsection (1)(a) of this section, but is not subject to defenses of the
obligor stated in subsection (1)(b) of this section or claims in recoupment
stated in subsection (1)(c) of this section against a person other than the
holder.
(3) Except as stated in subsection (4) 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 (section 28-3-306) 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.
(4) 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
subsection (1) 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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