A taker of a negotiable instrument may be denied the status and protection of a holder in due course if:
A) one party is a consumer.
B) the close-connection doctrine applies.
C) the instrument is bearer paper.
D) the presentment is not made in a commercially reasonable manner.

Question

Quizplus · Accepted Answer

The close-connection doctrine can deny a taker the status and protection of a holder in due course if the taker and the debtor have a close relationship that raises suspicions about the transaction's fairness or the instrument's issuance. This doctrine is an exception to the general rules governing negotiable instruments, aiming to prevent abuse of the holder in due course status in situations where the parties are not dealing at arm's length.

A Taker of a Negotiable Instrument May Be Denied the Status