California · Commercial Code
COM §9622: (a) A secured party’s acceptance of collateral in full or partial satisfaction of the obligation it secures does all of the following: (1) It discharges the obligation to the extent consented to by th
What this law says, in plain English
When a creditor accepts collateral to satisfy a debt, it discharges the obligation to the extent agreed upon.
Read the full statutory text
(a) A secured party’s acceptance of collateral in full or partial satisfaction of the obligation it secures does all of the following: (1) It discharges the obligation to the extent consented to by the debtor. (2) It transfers to the secured party all of a debtor’s rights in the collateral. (3) It discharges the security interest or agricultural lien that is the subject of the debtor’s consent and any subordinate security interest or other subordinate lien. (4) It terminates any other subordinate interest. (b) A subordinate interest is discharged or terminated under subdivision (a), even if the secured party fails to comply with this division.
Verify at the official source: California legislative text
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