For an HDC to take an instrument "in good faith," how does the UCC define good faith?
A)Good faith is not defined;it is left to the judgment of the individual HDC.
B)Whether the holder himself acted reasonably when taking the instrument.
C)Using the proper degree of caution that an objective,reasonable holder would have.
D)Whether the holder himself acted honestly when taking the instrument.
E)Under reasonable commercial standards of fair dealing.

Question

Quizplus · Accepted Answer

A)The UCC defines good faith as "honesty in fact and the observance of reasonable
commercial standards of fair dealing" [3-103a)4)].Therefore,to act in good faith,a holder must not deviate from the reasonable commercial standards of fair dealing.
B)The UCC defines good faith as "honesty in fact and the observance of reasonable commercial standards of fair dealing" [3-103a)4)].Therefore,to act in good faith,a holder must not deviate from the reasonable commercial standards of fair dealing.

For an HDC to Take an Instrument "In Good Faith