(a) Except as stated in subsection (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 (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;
(2) A defense of the obligor stated in another section of this article 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 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 subsection (a)(1) of this section, but is not subject to defenses of the obligor stated in subsection (a)(2) of this section or claims in recoupment stated in subsection (a)(3) of this section against a person other than the holder.
(c) Except as stated in subsection (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 (section 4-3- 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.
(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 subsection (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.
Source: L. 94: Entire article R&RE, p. 856, § 1, effective January 1, 1995.
Notes of Decisions
Willey v. Mayer, 876 P.2d 1260 (Colo. 1994).
· cites it 12× “Thus, argued Mayer and Western Slope, even if Willey was a holder in due course, Willey was not immune under section 4-3-305 from the defense that the signature was unauthorized.”
Flatiron Linen, Inc. v. First Am. State Bank, 1 P.3d 244 (Colo. Ct. App. 2000).
· cites it 2× “Plaintiff asserts that it was a holder in due course and that the obligated bank was, therefore, precluded from asserting any defenses other than those listed in § 4-3-305(a)(1), C.R.S.1999. We disagree.”
Georg v. Metro Fixtures Contractors, Inc., 178 P.3d 1209 (Colo. 2008).
· cites it 2× “that there is an uncured default with respect to payment of another instrument issued as part of the same series, (iv) unthout notice that the instrument contains an unauthorized signature or has been altered, (v) without notice of any claim to the instrument described in…”
Meyers v. Bj Johanningmeier, 735 P.2d 206 (Colo. Ct. App. 1987).
· cites it 5× “Section 4-3-305, C.R.S. (Official Comment 7) states: “The test of the defense [stated in this subsection] is that of excusable ignorance of the contents of the writing signed.”
Stotler v. Geibank Indus. Bank, 827 P.2d 608 (Colo. Ct. App. 1992).
· cites it 5× “In addition, the affidavits filed by Geibank in support of its first motion for summary judgment were adequate to prove holder in due course status against plaintiffs’ allegations in the complaint.”
Liberty Mortg. Corp. v. Fiscus, 379 P.3d 278 (Colo. 2016).
“§ 4-3-305(a)(1), (b). On the other hand, other defenses enumerated in Article 8 and those provided by contract law may not be used to challenge the enforcement of an instrument.”
Deutsche Bank Trust Co. Americas v. Samora, 321 P.3d 590 (Colo. Ct. App. 2013).
“§ 4-3-305 emt. 1, C.R.S. 2012 ("The test of the defense [of fraud in the factum] is that of excusable ignorance of the contents of the writing signed.”
Condado Aruba Caribbean Hotel v. Tickel, 561 P.2d 23 (Colo. Ct. App. 1977).
· cites it 2× “See § 4-3-305(2), C.R.S.1973. Finally, plaintiff contends that since defendant paid a portion of the debt, he has reaffirmed it, and is therefore liable for the remainder.”
Emarine v. Haley, 892 P.2d 343 (Colo. Ct. App. 1994).
“See §§ 4-3-305 and 4-3-605, C.R.S. (1992 Repl.”
— Colo. Rev. Stat. § 4-3-305(2) — 2 cases
Willey v. Mayer, 876 P.2d 1260 (Colo. 1994).
“Thus, argued Mayer and Western Slope, even if Willey was a holder in due course, Willey was not immune under section 4-3-305 from the defense that the signature was unauthorized.”
Condado Aruba Caribbean Hotel v. Tickel, 561 P.2d 23 (Colo. Ct. App. 1977).
“See § 4-3-305(2), C.R.S.1973. Finally, plaintiff contends that since defendant paid a portion of the debt, he has reaffirmed it, and is therefore liable for the remainder.”
— Colo. Rev. Stat. § 4-3-305(2)(b) — 1 case
Willey v. Mayer, 876 P.2d 1260 (Colo. 1994).
“Thus, argued Mayer and Western Slope, even if Willey was a holder in due course, Willey was not immune under section 4-3-305 from the defense that the signature was unauthorized.”
— Colo. Rev. Stat. § 4-3-305(2)(c) — 3 cases
Meyers v. Bj Johanningmeier, 735 P.2d 206 (Colo. Ct. App. 1987).
“Section 4-3-305, C.R.S. (Official Comment 7) states: “The test of the defense [stated in this subsection] is that of excusable ignorance of the contents of the writing signed.”
— Colo. Rev. Stat. § 4-3-305(a) — 3 cases
Georg v. Metro Fixtures Contractors, Inc., 178 P.3d 1209 (Colo. 2008).
“that there is an uncured default with respect to payment of another instrument issued as part of the same series, (iv) unthout notice that the instrument contains an unauthorized signature or has been altered, (v) without notice of any claim to the instrument described in…”
— Colo. Rev. Stat. § 4-3-305(a)(1) — 3 cases
Flatiron Linen, Inc. v. First Am. State Bank, 1 P.3d 244 (Colo. Ct. App. 2000).
“Plaintiff asserts that it was a holder in due course and that the obligated bank was, therefore, precluded from asserting any defenses other than those listed in § 4-3-305(a)(1), C.R.S.1999. We disagree.”
Liberty Mortg. Corp. v. Fiscus, 379 P.3d 278 (Colo. 2016).
“§ 4-3-305(a)(1), (b). On the other hand, other defenses enumerated in Article 8 and those provided by contract law may not be used to challenge the enforcement of an instrument.”
— Colo. Rev. Stat. § 4-3-305(a)(2) — 1 case
— Colo. Rev. Stat. § 4-3-305(a2) — 1 case
— Colo. Rev. Stat. § 4-3-305(b) — 1 case
Annotations are extracted automatically from the opinions in the
Syfert caselaw corpus and ranked by authority, recency, and
treatment. Dots show Syfertize treatment of the citing case itself.