Buying a negotiable instrument at a discounted price demonstrates lack of good faith.

Question

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Buying a negotiable instrument at a discounted price does not in itself demonstrate lack of good faith. In fact, buying discounted or distressed instruments can sometimes be a legitimate investment strategy. However, if the buyer is aware of some defect or issue with the instrument that would lower its value, and fails to disclose this information or takes advantage of the seller's lack of knowledge, that could be considered bad faith.

Buying a Negotiable Instrument at a Discounted Price Demonstrates Lack