Nev. Rev. Stat. » NRS: CHAPTER 104 - UNIFORM COMMERCIAL CODE—ORIGINAL ARTICLES
Nevada Revised Statutes

Nev. Rev. Stat. § 104.3305 (2026)

Defenses and claims in recoupment

✓ current as of July 2026
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NRS 104.3305  Defenses and claims in recoupment.

      1.  Except as otherwise provided in 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:

             (1) Infancy of the obligor to the extent it is a defense to a simple contract;

             (2) Duress, lack of legal capacity or illegality of the transaction which, under other law, nullifies the obligation of the obligor;

             (3) 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

             (4) Discharge of the obligor in insolvency proceedings;

      (b) 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

      (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 paragraph (a) of subsection 1, but is not subject to defenses of the obligor stated in paragraph (b) of subsection 1 or claims in recoupment stated in paragraph (c) of subsection 1 against a person other than the holder.

      3.  Except as otherwise provided in subsection 4, 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 (NRS 104.3306) 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.

      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 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.

      (Added to NRS by 1965, 826; A 1993, 1275; 2005, 1998)

     

Notes of Decisions
Cited in 9 cases (1 in the last 5 years), 1969–2021 · leading case: Bradley v. Romeo, 716 P.2d 227 (Nev. 1986).
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Bradley v. Romeo, 716 P.2d 227 (Nev. 1986). “3408 (UCC 3-408). NRS 104.3408 provides, in relevant part: Consideration.”
Sea Air Support, Inc. v. Herrmann, 613 P.2d 413 (Nev. 1980). “NRS 104.3305. “A holder in due course is a holder who takes the [negotiable] instrument: (a) For value; and (b) In good faith; and (c) Without notice that it is overdue or has been dishonored or of any cjefense against or claim to it on the part of any person.”
Contrail Leasing Partners, Ltd. v. Exec. Serv. Corp., 688 P.2d 765 (Nev. 1984). “” NRS 104.3305. A holder in due course is a “holder who takes the instrument: (a) For value; and (b) In good faith; and (c) Without notice .”
St. James v. Diversified Com. Fin. Corp., 714 P.2d 179 (Nev. 1986). “NRS 104.3305 (hereafter referred to as “§ 3-305”).”
Sandler v. Eighth Jud. Dist. Court, Etc., 614 P.2d 10 (Nev. 1980). “NRS 104.3305 provides that a holder in due course takes an instrument free from: "2.”
O'Bannon Plaza LLC v. CAB Props., LLC (In re O'Bannon Plaza LLC), 523 B.R. 720 (D. Nev. 2014). “The bankruptcy court overruled Debtor’s objection that Debtor could recover the escrow funds from CAB; the court found CAB to be a holder in due course pursuant to Nevada Revised Statutes § 104.3305, and “the language of the governing documents does not require the result…”
Sandler v. Eighth Jud. Dist. Court of the State of Nevada, 614 P.2d 10 (Nev. 1980). “NRS 104.3305 provides that a holder in due course takes an instrument free from: “2.”
Watkins v. Sheriff of Clark Cnty., 453 P.2d 611 (Nev. 1969). “NRS 104.3305. Western Auto was protected against the claim of the rightful owner.”
InjuryLoans.com, LLC v. Buenrostro (D. Nev. 2021). · cites it 2× “¶¶ 185–189) (alleging the same sections, in addition to NRS 104.3305, provide a cause of action for “Violations of UCC”).”
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