The Federal Trade Commission (FTC)holder in due course (HDC)rule applies when a buyer ________.

Question

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The HDC rule applies when a buyer signs a sales contract that includes a promissory note. This rule protects a holder in due course (such as a bank or individual who purchases the note) from the claims or defenses that the original purchaser (the debtor/buyer) may have against the seller. It allows the holder in due course to collect on the debt without being subject to these claims or defenses. The other choices may not necessarily involve a holder in due course and do not directly apply to the HDC rule.

The Federal Trade Commission (FTC)holder in Due Course (HDC)rule Applies