[Anonymous]

Which of the following actions does not discharge a prior party to a commercial instrument?

A. Good faith payment or satisfaction of the instrument

B. Cancellation of that prior party’s indorsement

Correct C. The holder’s oral renunciation of that prior party’s liability

D. The holder’s intentional destruction of the instrument

The holder’s oral renunciation of that prior party’s liability does not discharge a prior party to a commercial instrument. One way to arrive at this correct answer is through process of elimination:

Good faith payment or satisfaction of the instrument does discharge a prior party to the instrument.

Cancellation of that prior party’s indorsement does discharge a prior party to the instrument.

A holder’s intentional destruction of the instrument does end all liability.

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Reunification is rejection. If the holder rejects the prior party’s liability, why is that not a discharge?