In a nonconsumer transaction,a holder in due course takes the instrument free from:
A)all claims on the part of any person.
B)all defenses of any party with whom he has not dealt, except for a limited number of defenses that are available against anyone, including a holder in due course.
C)the defense of incapacity, duress, or illegality that renders the obligation void.
D)Both (a) and (b) are correct.

Question

Quizplus · Accepted Answer

A holder in due course takes the instrument free from all claims on the part of any person and all defenses of any party with whom he has not dealt, except for a limited number of defenses that are available against anyone, including a holder in due course. However, a holder in due course does not take the instrument free from the defense of incapacity, duress, or illegality that renders the obligation void.

In a Nonconsumer Transaction,a Holder in Due Course Takes the Instrument