A holder in due course may be free from which of the following defenses?
A)Infancy-a party is below the legal age of consent.
B)Forgery.
C)Fraud in the essence.
D)Breach of contract.
E)Material alteration of a completed instrument.

Question

Quizplus · Accepted Answer

A)A party who is aware of any claim or defense to an instrument has notice and
cannot become an HDC [UCC 3-302a)2)v),vi)].However,a party who had no reason to know various claims or defenses applied to an instrument,even though they exist,is not prevented from becoming an HDC.Breach of contract is a "personal" defense that an HDC may not be subject to.
B)A party who is aware of any claim or defense to an instrument has notice and cannot become an HDC [UCC 3-302a)2)v),vi)].However,a party who had no reason to know various claims or defenses applied to an instrument,even though they exist,is not prevented from becoming an HDC.Breach of contract is a "personal" defense that an HDC may not be subject to.
C)A party who is aware of any claim or defense to an instrument has notice and cannot become an HDC [UCC 3-302a)2)v),vi)].However,a party who had no reason to know various claims or defenses applied to an instrument,even though they exist,is not prevented from becoming an HDC.Breach of contract is a "personal" defense that an HDC may not be subject to.
D)A party who is aware of any claim or defense to an instrument has notice and cannot become an HDC [UCC 3-302a)2)v),vi)].However,a party who had no reason to know various claims or defenses applied to an instrument,even though they exist,is not prevented from becoming an HDC.Breach of contract is a "personal" defense that an HDC may not be subject to.

A Holder in Due Course May Be Free from Which