Defenses

Question 1

Real Defenses are available against a

Answer 1

HDC and holder

Question 2

What are the 8 Real Defenses

Answer 2

1. Infancy
2. Incapacity
   3.Duress-
3. Illegality
4. Fraud in the factum.
5. BK
6. Alteration and Forgery
7. Sol

Question 3

What is fraud in the factum ?

Answer 3

1) Signer is not aware that he signed a negotiable instrument; and

2) he must not have had a reasonable opportunity to become aware

Question 4

Alteration and Forgery defense can be asserted when

Answer 4

Any time an alteration or forgery that is apparent enough to cause a reasonable person to question its authenticity

Question 5

What is the SOL for NI’s

Answer 5

1) Checks = 3 yers from dishonor or 10 years from date of draft whichever is earlier

2) Notes=
payable at a definite time = 6 years within due due date.
Payable on demand= action must be brought within 6 years after demand for payment

Question 6

Personal defenses are not effective against a

Answer 6

HDC

Question 7

What are the 3 personal defenses ?

Answer 7

1. Document was never issued
2. Contract Defenses (breach of warranty, etc)
3. Claims in Recoupment

Question 8

What is a claim in recoupment ?

Answer 8

A offset against an amount owed on an instrument. A claim in recoupment must arise from the transaction that gave right to the instrument.