Business Law and the Legal Environment 7th Edition by Jeffrey Beatty,Susan Samuelson

Exercise 13

CPA QUESTION Bond fraudulently induced Teal to make a note payable to Wilk, to whom Bond was indebted. Bond delivered the note to Wilk. Wilk negotiated the instrument to Monk, who purchased it with knowledge of the fraud and after it was overdue. If Wilk qualifies as a holder in due course, which of the following statements is correct? (a) Monk has the standing of a holder in due course through Wilk.
(b) Teal can successfully assert the defense of fraud in the inducement against Monk.
(c) Monk personally qualifies as a holder in due course.
(d) Teal can successfully assert the defense of fraud in the inducement against Wilk.