Vermont § 310 - § 3—310.

§ 310. § 3—310.

• Effect of instrument on obligation for which taken (a) Unless otherwise agreed, if a certified check, cashier’s check, or teller’s check
  is taken for an obligation, the obligation is discharged to the same extent discharge
  would result if an amount of money equal to the amount of the instrument were taken
  in payment of the obligation. Discharge of the obligation does not affect any liability
  that the obligor may have as an indorser of the instrument. (b) Unless otherwise agreed and except as provided in subsection (a) of this section,
  if a note or an uncertified check is taken for an obligation, the obligation is suspended
  to the same extent the obligation would be discharged if an amount of money equal
  to the amount of the instrument were taken, and the following rules apply: (1) In the case of an uncertified check, suspension of the obligation continues until
  dishonor of the check or until it is paid or certified. Payment or certification of
  the check results in discharge of the obligation to the extent of the amount of the
  check. (2) In the case of a note, suspension of the obligation continues until dishonor of the
  note or until it is paid. Payment of the note results in discharge of the obligation
  to the extent of the payment. (3) Except as provided in paragraph (4) of this subsection, if the check or note is dishonored
  and the obligee of the obligation for which the instrument was taken is the person
  entitled to enforce the instrument, the obligee may enforce either the instrument
  or the obligation. In the case of an instrument of a third person which is negotiated
  to the obligee by the obligor, discharge of the obligor on the instrument also discharges
  the obligation. (4) If the person entitled to enforce the instrument taken for an obligation is a person
  other than the obligee, the obligee may not enforce the obligation to the extent the
  obligation is suspended. If the obligee is the person entitled to enforce the instrument
  but no longer has possession of it because it was lost, stolen, or destroyed, the
  obligation may not be enforced to the extent of the amount payable on the instrument,
  and to that extent the obligee’s rights against the obligor are limited to enforcement
  of the instrument. (c) If an instrument other than one described in subsection (a) or (b) of this section
  is taken for an obligation, the effect is (i) that stated in subsection (a) of this
  section if the instrument is one on which a bank is liable as maker or acceptor, or
  (ii) that stated in subsection (b) of this section in any other case. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)