A holder in due course takes a negotiable instrument free of all:
A) negotiable defenses.
B) real defenses.
C) claims in recoupment.
D) claims to the bearer.

Question

Quizplus · Accepted Answer

A holder in due course takes a negotiable instrument free of all personal defenses, claims to the instrument, and claims in recoupment either of the person obligated on the instrument or of a third party. A holder in due course does not take the instrument free of the real defenses, which go to the validity of the instrument or of claims that develop after he becomes a holder.

A Holder in Due Course Takes a Negotiable Instrument Free