A person who acquires an instrument with knowledge that there is a defense a party may have cannot be an HDC.

Question

Quizplus · Accepted Answer

According to the Uniform Commercial Code (UCC), a person cannot be considered a holder in due course (HDC) if they have knowledge of a defense that a party may have against the transfer of the instrument. This is because an HDC must acquire the instrument in good faith and without notice of any claims or defenses. Therefore, if someone has knowledge of a defense, they cannot be an HDC.

A Person Who Acquires an Instrument with Knowledge That There