2006 New York Code - Impairment Of Recourse Or Of Collateral

 
  Section 3--606. Impairment of Recourse or of Collateral.
    (1)  The  holder  discharges any party to the instrument to the extent
  that without such party's consent the holder
         (a) without express reservation of rights releases or agrees  not
             to sue any person against whom the party has to the knowledge
             of  the  holder  a right of recourse or agrees to suspend the
             right to  enforce  against  such  person  the  instrument  or
             collateral  or  otherwise discharges such person, except that
             failure or  delay  in  effecting  any  required  presentment,
             protest or notice of dishonor with respect to any such person
             does  not discharge any party as to whom presentment, protest
             or notice of dishonor is effective or unnecessary; or
         (b) unjustifiably impairs any collateral for the instrument given
             by or on behalf of the party or any person  against  whom  he
             has a right of recourse.
    (2)  By  express reservation of rights against a party with a right of
  recourse the holder preserves
         (a) all his rights against such party as of  the  time  when  the
             instrument was originally due; and
         (b) the right of the party to pay the instrument as of that time;
             and
         (c) all rights of such party to recourse against others.