A defense that may not be used against a holder in due course of a negotiable instrument is a:
A)limited defense.
B)personal defense.
C)real defense.
D)secondary defense.

Question

Quizplus · Accepted Answer

A personal defense is one that is based on the specific circumstances or relationship between the parties involved in the transaction. It cannot be used against a holder in due course, who is a third-party holder that has acquired the negotiable instrument in good faith and for value, without notice of any defects or claims that may exist. On the other hand, a real defense is based on the underlying validity of the transaction or the instrument itself, such as forgery, fraud, illegality, or lack of capacity, and may be used against a holder in due course, subject to certain exceptions. A limited defense or a secondary defense is one that is available only to a party who has a limited interest in the instrument or is not the original obligor, and may also be subject to certain exceptions. Therefore, the best choice is B.

A Defense That May Not Be Used Against a Holder