holder in due course
Bona fide assignee
A holder in due course is someone who acquires a negotiable instrument—such as a check or promissory note—in good faith, for value, and without notice of any defects or claims against it.
This legal status provides special protection: the holder can enforce the instrument even if the original transaction was flawed.
The bank qualified as a holder in due course and collected despite the fraud.
- payeePerson owed payment
- contract lawRules governing binding agreements
- checkOrder to pay
- bad checkUnfunded written payment
- bearerOne who conveys something
endorsee · commercial law · fraud · defenses · personal defense · promissory note · negotiable · good faith · duress · illegality · forgery · bona fide · incapacity · transferee · third party · bill of exchange · consideration · purchaser
- contract lawobligation, performance, capacity, breach, contract terms
- negotiable instrumentsbill of exchange, promissory note, promissory notes, cashier's check, bank draft
- sales lawsale, buyer, goods, seller, contract termination