The holder of a negotiable instrument is holder in due course if the holder has taken the instrument for value; in good faith; and without notice of it being overdue, fraudulent, or subject to claim by another party.

Question

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A holder in due course is someone who has acquired a negotiable instrument under certain conditions that include taking it for value, in good faith, and without notice of any defect such as it being overdue, fraudulent, or subject to any claim by another party, thereby providing the holder certain protections.

The Holder of a Negotiable Instrument Is Holder in Due