A(n) ________ defense is a type of defense that can be raised against enforcement of a negotiable instrument by an ordinary holder but not against an HDC.
A) discharge in bankruptcy
B) extreme duress
C) personal
D) universal

Question

Quizplus · Accepted Answer

A personal defense is a type of defense that is not effective against an HDC, who takes a negotiable instrument in good faith and for value. Personal defenses include forgery, fraud in the inducement, illegality, and mental incapacity of parties involved in the transaction. A discharge in bankruptcy is a matter of law that affects the underlying obligation, not the negotiability of an instrument. Extreme duress is a criminal defense that is not relevant to the enforceability of a negotiable instrument. Universal defenses, such as lack of consideration or breach of contract, apply to all parties in a transaction, including HDCs.

A(n) ________ Defense Is a Type of Defense That Can