Holder IN Due Course (HIDC)

Question 1

Define Holder in Due Course

Answer 1

A holder, of negotiable instrument, for value, in good faith, without notice of dishonor or overdue payment, and without notice of any claim or defense to instrument

Question 2

Holder

Answer 2

Must be in bearer or order

Question 3

Negotiable Instrument

Answer 3

Must be a promise or order, payable to order or bearer, for a mixed amount, of money, free from conditions, with no extraneous circumstances, at a definite time or on demand.

Question 4

Value

Answer 4

For money, stated on the instrument

Question 5

Good Faith

Answer 5

Honesty in fact, with reasonable standards of dealings

Question 6

Notice & Dishonor

Answer 6

Actual notice, receipt of notice, is made aware instrument is invalid or been dishonored. Dishonored, maker or drawee refuses to pay.

Question 7

Shelter Rule

Answer 7

Where a HIDC transfers a negotiable instrument, the transferee obtains the rights as a HIDC