Asked by
Yessika Rodriguez
on Dec 20, 2024
Verified
Jill issues a negotiable promissory note to Cherice, who indorses it and delivers it to Lee. If Lee knows that the note was given to Cherice in exchange for worthless securities, Lee cannot be a holder in due course.
Negotiable Promissory Note
A financial document that contains a written promise to pay a specified sum of money to a named person or bearer under certain terms.
Worthless Securities
Financial instruments that have lost all monetary value, often resulting in a total loss for the holder.
Holder in Due Course
A legal term for a person who has acquired a negotiable instrument in good faith and for value, and thus has certain rights to it free from many defenses.
- Differentiate between personal (contractual) and real defenses applicable to negotiable instruments.
- Familiarize oneself with the distinctions in rights and defenses between a holder in due course and a standard holder.
Verified Answer
CY
Learning Objectives
- Differentiate between personal (contractual) and real defenses applicable to negotiable instruments.
- Familiarize oneself with the distinctions in rights and defenses between a holder in due course and a standard holder.