A holder in due course:
A) has greater obligations to pay an instrument than a mere holder.
B) must notify subsequent transferees of his holder in due course status.
C) can obtain greater rights to payment of an instrument than a holder.
D) can give greater rights to a transferee than he has as a holder in due course.
E) has less rights to payment of an instrument than a holder.

Question

Quizplus · Accepted Answer

A holder in due course can obtain greater rights to payment of an instrument than a mere holder. This is because a holder in due course is someone who takes the instrument for value, in good faith, and without notice of any defenses or claims against it. As a result, a holder in due course is immune to most of the defenses that the maker or payer could raise against other holders of the instrument.

A Holder in Due Course