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

Question

Quizplus · Accepted Answer

A)A holder must take an instrument without notice of various claims to or defects of
the negotiable instrument.A holder cannot be an HDC who has notice or is aware of any of the following defects [UCC 3-302a)]:
1.The instrument is overdue.
2.The instrument has been dishonored.
3.The instrument was issued as part of a series that is in default.
4.The instrument has been altered or contains an unauthorized signature.
5.There is a claim to the instrument.The claims are described in Section 3-306. )
6.Another party has a defense or claim in recoupment to the instrument.
B)A holder must take an instrument without notice of various claims to or defects of the negotiable instrument.A holder cannot be an HDC who has notice or is aware of any of the following defects [UCC 3-302a)]:
1.The instrument is overdue.
2.The instrument has been dishonored.
3.The instrument was issued as part of a series that is in default.
4.The instrument has been altered or contains an unauthorized signature.
5.There is a claim to the instrument.The claims are described in Section 3-306. )
6.Another party has a defense or claim in recoupment to the instrument.
C)A holder must take an instrument without notice of various claims to or defects of the negotiable instrument.A holder cannot be an HDC who has notice or is aware of any of the following defects [UCC 3-302a)]:
1.The instrument is overdue.
2.The instrument has been dishonored.
3.The instrument was issued as part of a series that is in default.
4.The instrument has been altered or contains an unauthorized signature.
5.There is a claim to the instrument.The claims are described in Section 3-306. )
6.Another party has a defense or claim in recoupment to the instrument.
D)A holder must take an instrument without notice of various claims to or defects of the negotiable instrument.A holder cannot be an HDC who has notice or is aware of any of the following defects [UCC 3-302a)]:
1.The instrument is overdue.
2.The instrument has been dishonored.
3.The instrument was issued as part of a series that is in default.
4.The instrument has been altered or contains an unauthorized signature.
5.There is a claim to the instrument.The claims are described in Section 3-306. )
6.Another party has a defense or claim in recoupment to the instrument.
E)A holder must take an instrument without notice of various claims to or defects of the negotiable instrument.A holder cannot be an HDC who has notice or is aware of any of the following defects [UCC 3-302a)]:
1.The instrument is overdue.
2.The instrument has been dishonored.
3.The instrument was issued as part of a series that is in default.
4.The instrument has been altered or contains an unauthorized signature.
5.There is a claim to the instrument.The claims are described in Section 3-306. )
6.Another party has a defense or claim in recoupment to the instrument.

Which of the Following Does Not Prevent a Holder from Being