If there is a breach of contract,the negotiable instrument may be deemed unenforceable by a holder but enforceable by an HDC.

Question

Quizplus · Accepted Answer

This is because an HDC takes the negotiable instrument without any knowledge of the breach of contract, therefore, they are entitled to enforce it. However, a regular holder who is aware of the breach of contract may not be able to enforce the instrument.

If There Is a Breach of Contract,the Negotiable Instrument May