Michael issues a check to Paula.She negotiates the check to Harold as payment for a used television set.Harold has no notice of any claims or defenses and takes the check in good faith.Harold indorses the check and gives it to his son as a birthday present.
a.Is Harold's son a holder in due course? Explain.
b.What rights does Harold's son have with respect to the check? Why? Explain.
c.Assume that Michael has a defense of fraud in the inducement against Paula.Can he use that defense against Harold? Can he use that defense against Harold's son? Explain.

Question

Quizplus · Accepted Answer

The Answer of Michael issues a check to Paula.She negotiates the check to Harold as payment for a used television set.Harold has no notice of any claims or defenses and takes the check in good faith.Harold indorses the check and gives it to his son as a birthday present.
a.Is Harold's son a holder in due course? Explain.
b.What rights does Harold's son have with respect to the check? Why? Explain.
c.Assume that Michael has a defense of fraud in the inducement against Paula.Can he use that defense against Harold? Can he use that defense against Harold's son? Explain.

Michael Issues a Check to Paula