What is a key requirement for someone to be considered a holder in due course?
Holder in Due Course - Notice of Valid Defense

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Business, Social Studies
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University
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5 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
They must have a close personal relationship with the original holder.
They must be involved in a bulk transfer.
They must not have knowledge or reason to know of any defenses.
They must have knowledge of all defenses.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is an example of a defense that could affect holder in due course status?
A draft with a high interest rate
An overdue draft
A draft with no collateral
A timely draft
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Who is specifically excluded from obtaining holder in due course status according to the UCC?
Individuals involved in bulk transfers of commercial paper
Individuals who purchase a single instrument
Individuals who are unaware of any defenses
Individuals with no business relationship with the original holder
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In what situation might someone inheriting an instrument not become a holder in due course?
If they purchase it at a discount
If they inherit it through a will
If they obtain it through execution of a judgment lien
If they receive it as a gift
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How can common law limit an individual's ability to become a holder in due course?
By requiring them to have a business license
By restricting those closely related to the holder from transferring the note
By mandating a minimum purchase amount
By allowing only financial institutions to hold the status
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