A person who acquires a negotiable instrument with notice of a defense:
A) has acted in bad faith.
B) has acted illegally.
C) cannot be a holder in due course.
D) has taken unfair advantage of the maker.

Question

Quizplus · Accepted Answer

A person who acquires a negotiable instrument with notice of a defense cannot be a holder in due course. This means the holder cannot claim certain legal protections and may be subject to the same defenses as the original parties involved in the transaction. This does not necessarily mean the person acted in bad faith or illegally, but they are not considered to have the same rights as a holder in due course who acquires the instrument without notice of any defenses.

A Person Who Acquires a Negotiable Instrument with Notice of a Defense