The law gives certain holders of a negotiable instrument a preferred standing by protecting them from all defenses when they sue to collect payment.

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The law does give certain holders of a negotiable instrument (holders in due course) a preferred standing, but they are not protected from all defenses. They are protected from many personal defenses but not from real defenses such as fraud in the inducement, forgery, or illegality.

The Law Gives Certain Holders of a Negotiable Instrument a Preferred