Don,who owed Dan $1,000 for his share of the cost of a fishing trip they took together two years ago,transferred to Dan a check for $700 that he had just received from a customer.Has Dan given value for holder in due course purposes?
A) yes, because accepting an instrument in payment of a prior antecedent debt is considered to be value given for holder in due course purposes
B) yes, but only if Dan still intends to collect the remaining $300 from Don
C) no, because the check was less than the amount of the debt
D) no, because the check was from a business transaction and the debt was personal
E) no, because Don had a pre-existing duty to pay Dan the $1,000

Question

Quizplus · Accepted Answer

Accepting an instrument in payment of a prior antecedent debt is considered to be value given for holder in due course purposes. Therefore, even though the check was for $700 and not the full $1,000 owed, Dan has still given value for holder in due course purposes.

Don,who Owed Dan $1,000 for His Share of the Cost