Fraudulent alteration of an instrument is a defense even against a holder in due course.

Question

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The Uniform Commercial Code (UCC) provides that if an instrument has been fraudulently altered, then the alteration is a defense against all parties, including a holder in due course. This is because the alteration fundamentally changes the terms of the original agreement, and a holder in due course takes the instrument subject to all its defects and defenses.

Fraudulent Alteration of an Instrument Is a Defense Even Against