In order to become a holder in due course,one must take a negotiable instrument without notice of the following except:
A) that the instrument is overdue.
B) that the instrument has been dishonored.
C) that the instrument was signed by an agent.
D) that there was a claim to it by another person.
E) that there is a defense against it.

Question

Quizplus · Accepted Answer

A holder in due course is someone who takes a negotiable instrument for value, in good faith, and without notice of any defects or problems with the instrument. The options A, B, D, and E all relate to potential problems or defects with the instrument that a holder in due course would need to be unaware of to qualify. Option C, however, relates to the signatory of the instrument and is not a defect in the instrument itself, so it is not relevant to whether someone can be a holder in due course.

In Order to Become a Holder in Due Course,one Must