A mere holder or an assignee takes a negotiable instrument subject to all claims and defenses to it.

Question

Quizplus · Accepted Answer

According to the principle of "nemo dat quod non habet" (no one can give what they do not have), a mere holder or an assignee of a negotiable instrument takes it subject to all the claims and defenses that could be raised against the original holder or assignor. This means that they cannot acquire any better rights than their transferor had in the instrument.

A Mere Holder or an Assignee Takes a Negotiable Instrument