Business Law II- Chapter 29

A holder having the rights of a holder in due course is subject to the defense of fraud in the inducement.

FALSE

A holder through a holder in due course is subject to all defenses.

FALSE

A person who buys a note from a holder in due course knowing that the maker has a defense will not be a holder through a holder in due course.

FALSE

Illegality is a universal defense regardless of whether the illegality voids an instrument.

FALSE

Incapacity cannot be raised as a defense against a holder in due course.

FALSE

Instruments may not be negotiated if they have been dishonored by non-acceptance.

FALSE

The law gives certain holders of a negotiable instrument a preferred standing by protecting them from all defenses when they sue to collect payment.

FALSE

A holder can recover from any of the parties who are liable on the instrument, regardless of the order of the signatures on the instrument.

TRUE

A holder who is neither a holder in due course nor a holder through a holder in due course is subject to every defense, just as though the instrument were not negotiable.

TRUE

An ordinary contract defense is a limited defense not available against a holder in due course.

TRUE

For the purposes of determining holder in due course status, the requirement of value is similar to consideration.

TRUE

If general, transferees who are aware of facts that would make a reasonable person ask questions are deemed to know what they would have learned if they had asked questions.

TRUE

Incapacity of the maker or drawer is a limited defense not available against a holder in due course.

TRUE

The FTC rule concerning holders in due course is confined to consumer credit transactions.

TRUE

The defense that a signature was forged or signed without authority cannot be raised against any holder if the person whose name was signed has ratified it.

TRUE