Duress that causes the transfer of a negotiable instrument:
A)prevents its negotiation.
B)is a good defense against a holder in due course of the instrument.
C)is subject to rescission before the instrument is transferred to a holder in due course.
D)is a good defense against the maker of a note.

Question

Quizplus · Accepted Answer

Negotiation is effective to transfer an instrument even if the negotiation is obtained by fraud,duress,or mistake of any kind.A negotiation made under these circumstances is subject to rescission before the instrument has been negotiated to a transferee who can qualify as a holder in due course or a person paying the instrument in good faith and without knowledge of the factual basis for rescission or other remedy.

Duress That Causes the Transfer of a Negotiable Instrument