A Federal Trade Commission rule limits the rights of a holder in due course of an instrument that evidences a debt arising out of a(n):
A) consumer credit contract.
B) insurance contract.
C) consumer purchase paid for with a check.
D) construction contract.

Question

Quizplus · Accepted Answer

The FTC rule referred to is the Holder in Due Course Rule, which applies specifically to consumer credit contracts. It limits the rights of a holder in due course of an instrument by preventing them from having greater rights than the original creditor in certain situations, such as if the debtor has a claim or defense against the original creditor. Therefore, the correct answer is A, as the other options are not subject to this specific FTC rule.

A Federal Trade Commission Rule Limits the Rights of a Holder