BUSINESS ADMINISTRATION
BUSINESS LAW
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Holder in Due Course (HDC)
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Holder in Defense (HD)
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Holder in Universal Defense (HUD)
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Holder Through a Holder in Due Course (HHDC)
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Detailed explanation-1: -The UCC provides that to be an HDC, a person must be a holder of paper that is not suspiciously irregular, and she must take it in good faith, for value, and without notice of anything that a reasonable person would recognize as tainting the instrument.
Detailed explanation-2: -A holder is a person who legally obtains the negotiable instrument, with his name entitled on it, to receive the payment from the parties liable. A holder in due course (HDC) is a person who acquires the negotiable instrument bonafide for some consideration, whose payment is still due.
Detailed explanation-3: -A holder cannot sue all the prior parties whereas a holder in due course, has the right to sue all the prior parties for payment. A holder may or may not have obtained the instrument in good faith. On the other hand, the holder in due course must be a bonafide possessor of the negotiable instrument.
Detailed explanation-4: -Real defenses are good against any holder, including an HDC. These are infancy, void obligations, fraud in the execution, bankruptcy, discharge of which holder has notice, unauthorized signatures, and fraudulent alterations.