Montana Code 28-1-1504. When acceptance of novation may be rescinded
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28-1-1504. When acceptance of novation may be rescinded. When the obligation of a third person or an order upon the third person is accepted in satisfaction, the creditor may rescind the acceptance if:
Terms Used In Montana Code 28-1-1504
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: includes a corporation or other entity as well as a natural person. See Montana Code 1-1-201
(1)the debtor prevents the third person from complying with the order or from fulfilling the obligation;
(2)at the time the obligation or order is received, the third person is insolvent and the fact is unknown to the creditor; or
(3)before the creditor can, with reasonable diligence, present the order to the third person upon whom it is given, the third person becomes insolvent.