A limited defense will not defeat a holder in due course but will defeat an ordinary holder.

Question

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A holder in due course is someone who has acquired a negotiable instrument (like a check) in good faith and for value, without notice of any defect or defense against the instrument. A limited defense, such as one based on a breach of contract or a claim of fraud, may not be enough to defeat a holder in due course. However, such a defense could still be successful against an ordinary holder who is not a holder in due course.

A Limited Defense Will Not Defeat a Holder in Due