Housewares Inc. warrants its goods to be free of defects. Ivy issues an instrument to Housewares for the purchase of an appliance that proves to be defective. With respect to payment on the instrument, Ivy

A) is liable only to a subsequent holder of the instrument.
B) has a universal defense.
C) has a personal defense.
D) cannot avoid it.

Universal Defense

A defense that is valid against all holders of a negotiable instrument, including holders in due course (HDCs) and holders with the rights of HDCs. Universal defenses are also called real defenses.

Personal Defense

Legal defenses that a defendant may use in a court of law to challenge the validity of a claim based on personal circumstances or conditions.