Asked by
Rosmery Rodriguez
on Dec 16, 2024
Verified
Which of the following is false with regard to a holder in due course?
A) A holder in due course cannot be an immediate party.
B) A holder in due course is in a better position to be paid by the drawer or maker of the instrument than is an immediate holder, because there are fewer defences against his claim for payment.
C) A person cannot be a holder in due course if he knew the instrument had been obtained by the payee by fraud.
D) A person cannot be a holder in due course if he acquired the instrument in bad faith; e.g., he tricked the person into giving him the cheque.
E) A holder in due course is the same as the drawee or acceptor.
Holder in Due Course
A term in commercial law referring to a party who has received a negotiable instrument in a legitimate manner for value, without notice of any defects in the instrument or claims against it.
Immediate Party
A term not commonly used in a specific legal definition, but generally refers to parties directly involved in a legal transaction or matter.
Bad Faith
Deliberate deceit or a refusal to fulfill one's obligations or agreements, often implying a dishonest intent.
- Comprehend the legal structure governing negotiable instruments such as cheques and drafts, as well as the entitlements of the concerned parties.
Verified Answer
RS
Learning Objectives
- Comprehend the legal structure governing negotiable instruments such as cheques and drafts, as well as the entitlements of the concerned parties.