Which of the following does not prevent a holder from being a holder in due course?
A) Notice that the instrument is overdue.
B) Notice that the instrument has been dishonored.
C) Notice that the instrument was issued as part of a series that is in default.
D) Notice that the instrument has been altered or contains an unauthorized signature.
E) Notice that an employee other than the treasurer of a company signed an instrument.

Question

Quizplus · Accepted Answer

The concept of a holder in due course (HIDC) is primarily concerned with protecting the holder from defects in the instrument or problems with its issuance that they were unaware of at the time of acquisition. Notices such as the instrument being overdue, dishonored, part of a series in default, or containing alterations or unauthorized signatures can affect HIDC status because they indicate problems with the instrument's validity or enforceability. However, the fact that an employee other than the treasurer signed an instrument does not inherently prevent someone from being a holder in due course, as long as the signature is authorized and the holder has no notice of any fraud or irregularity.

Which of the Following Does Not Prevent a Holder from Being