Can the payee of a negotiable instrument be a holder in due course?

Question

Quizplus · Accepted Answer

Usually, the payee of a negotiable instrument cannot be a holder in due course because they are usually aware of any defenses or irregularities that may exist. This knowledge prevents them from meeting the requirements of being a holder in due course, such as taking the instrument in good faith and without notice of any problems. However, there may be exceptional circumstances where the payee can still be considered a holder in due course, such as if they took the instrument without knowledge of a defense that arose after they received it. Therefore, choice D is the best answer.

Can the Payee of a Negotiable Instrument Be a Holder