Edie is the payee of a bearer instrument-a promissory note in the amount of $1,000.Frank offers to irrigate Edie's ranch next week in ex?change for the note.Edie agrees and delivers the note to Frank.Frank is
A)an HDC,because he promised to perform services at a future date.
B)not an HDC,because he did not take the instrument without notice.
C)not an HDC,because he did not acquire the instrument in good faith.
D)not an HDC,because he did not yet give value for the instrument.

Question

Quizplus · Accepted Answer

In order to be considered a holder in due course (HDC), Frank would need to meet certain requirements, including acquiring the instrument for value and in good faith. While he did offer to provide services in exchange for the note, he has not yet performed those services and therefore has not given value for the instrument. Therefore, he cannot be considered an HDC.

Edie Is the Payee of a Bearer Instrument-A Promissory Note