To qualify as a holder in due course under the shelter principle,the holder must acquire the instrument from a holder in due course,or be able to trace his or her title back to a holder in due course.

Question

Quizplus · Accepted Answer

According to the shelter principle, a person who acquires an instrument becomes a holder in due course if they can trace their title back to a previous holder in due course, even if they themselves did not qualify as a holder in due course when they acquired the instrument. Therefore, the statement is true.

To Qualify as a Holder in Due Course Under the Shelter