A "holder" of order paper can best be described as:
A) the payee.
B) any person in possession of the instrument.
C) any person in possession of the instrument if it is payable to or indorsed to her.
D) the first party to come in contact with a negotiable instrument.

Question

Quizplus · Accepted Answer

A "holder" of order paper is defined as any person in possession of the instrument if it is payable to or indorsed to her. Therefore, choice C is the most accurate description of a holder of order paper. The payee (choice A) may be a holder, but not necessarily. Choice B is too broad as possession alone does not make someone a holder. Choice D is incorrect as there may have been previous parties who possessed the instrument before the current holder.

A "Holder" of Order Paper Can Best Be Described As