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Cal. Commercial Code § 3305 (2026)

✓ current as of May 2026
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(a)Except as stated in subdivision (b), the right to enforce the obligation of a party to pay an instrument is subject to all of 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 which, under other law, nullifies the obligation of the obligor, (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 division 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.

(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 on 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 paragraph (1) of subdivision (a), but is not subject to defenses of the obligor stated in paragraph (2) of subdivision (a) or claims in recoupment stated in paragraph (3) of subdivision (a) against a person other than the holder.

(c)Except as stated in subdivision (d), 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 3306) 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 subdivision (a) 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.

Notes of Decisions
Cited in 6 cases (1 in the last 5 years), 1997–2021 · leading case: In Re: Coyita Voncile Thomas, Debtor. Coyita Voncile Thomas v. Money Mart Fin. Servs., Inc., 428 F.3d 735 (8th Cir. 2005).
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In Re: Coyita Voncile Thomas, Debtor. Coyita Voncile Thomas v. Money Mart Fin. Servs., Inc., 428 F.3d 735 (8th Cir. 2005). “” Cal. Com.Code § 3305(a). 6 . Ind.Code Ann.”
McMullen Oil Co. v. Crysen Refining, Inc. (In Re McMullen Oil Co.), 251 B.R. 558 (Bankr. C.D. Cal. 2000). “See Commercial Code § 3305(b) (UCC § 3305(b)).”
In Re Zapanta, 204 B.R. 762 (Bankr. S.D. Cal. 1997). “The Hines court held pursuant to Cal.Com.Code § 3305 one is not entitled to enforce an instrument where a defense to the" enforcement is a discharge in bankruptcy.”
In re: Kimberly Dawn Franklin (9th Cir. BAP 2021). · cites it 2× “Cal. Com. Code § 3305 (c) (“the obligor may not assert against the person entitled to enforce the instrument, a defense, claim in recoupment, or claim to the instrument (Section 3306) of another person .”
In re: Marlow Howard Hooper & Monique Lori Hooper (9th Cir. BAP 2012). “GMAC also 26 27 9 The Official Comment to Cal. Com. Code § 3305 (b) notes: “A blank indorsement is usually the signature of the indorser on 28 the back of the instrument without other words.”
Coyita Thomas v. Money Mart (8th Cir. 2005). “” Cal. Com. Code § 3305 (a). -4- 707. Hines, however, ignores this important distinction and effectively expands “discharge” to include “potential discharge,” allowing the obligor to benefit from a discharge it has not yet earned.”
— Cal. Commercial Code § 3305(a) — 1 case
In Re: Coyita Voncile Thomas, Debtor. Coyita Voncile Thomas v. Money Mart Fin. Servs., Inc., 428 F.3d 735 (8th Cir. 2005). “” Cal. Com.Code § 3305(a). 6 . Ind.Code Ann.”
— Cal. Commercial Code § 3305(b) — 1 case
McMullen Oil Co. v. Crysen Refining, Inc. (In Re McMullen Oil Co.), 251 B.R. 558 (Bankr. C.D. Cal. 2000). “See Commercial Code § 3305(b) (UCC § 3305(b)).”
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