Michael issues a check to Paula. She negotiates the check to Harold as payment for a used television. Harold has no notice of any claims or defenses and takes the check in good faith. Harold indorses the check and gives it to his son as a birthday present.
a. Is Harold's son a holder in due course? Explain.
b. What rights does Harold's son have with respect to the check? Why? Explain.
cAssume that Michael has a personal defense of fraud in the inducement against Paula. Can he use that defense against Harold? Can he use that defense against Harold's son? Explain.

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The Answer of Michael issues a check to Paula. She negotiates the check to Harold as payment for a used television. Harold has no notice of any claims or defenses and takes the check in good faith. Harold indorses the check and gives it to his son as a birthday present.
a. Is Harold's son a holder in due course? Explain.
b. What rights does Harold's son have with respect to the check? Why? Explain.
cAssume that Michael has a personal defense of fraud in the inducement against Paula. Can he use that defense against Harold? Can he use that defense against Harold's son? Explain.

Michael Issues a Check to Paula