Muni Investment Company signs a check payable to Enterprise Lenders, Inc., to buy a promissory note executed by Fallow Corporation. This check
A) does not constitute sufficient consideration for HDC status.
B) does not satisfy the value requirement for HDC status.
C) satisfies the consideration requirement for HDC status.
D) satisfies the value requirement for HDC status.

Question

Quizplus · Accepted Answer

The check from Muni Investment Company constitutes sufficient value for HDC status because it represents the purchase price of the promissory note executed by Fallow Corporation. The consideration requirement for HDC status is satisfied when there is a promise to pay, a transfer of value, or an exchange of promises to pay.

Muni Investment Company Signs a Check Payable to Enterprise Lenders