Ranjit currently has possession of a cheque that was created by Maura.Although Maura created that cheque on January 1, the instrument is dated June 1.The cheque originally was payable to Nora.The cheque now bears endorsements by Nora and Shelley.Maura, Nora, Shelley, and Ranjit are the only parties that have dealt with the cheque.Which of the following statements is TRUE?

Question

Quizplus · Accepted Answer

Ranjit may be a holder in due course even if he did not personally provide consideration to anyone. In order to qualify as a holder in due course, Ranjit must meet the following requirements: he must take the cheque for value, in good faith, and without notice that the cheque is overdue, has been dishonoured, or that there is any defence against it. Consideration is not required to be paid by the holder in due course, but the previous parties must have provided some form of consideration for the cheque.

Ranjit Currently Has Possession of a Cheque That Was Created