Kris transfers a note, on which Lin is the maker, to Mari, who takes it for value and in good faith. Mari knows that Kris breached the contract underlying the note, giving Lin a defense against payment. With respect to this note, Mari is
A)a knowledgeable holder in due course.
B)an ordinary holder.
C)an ordinary holder in due course.
D)a knowledgeable acceptor.

Question

Quizplus · Accepted Answer

Mari is an ordinary holder because she is aware of the breach of contract, which prevents her from being a holder in due course. A holder in due course must take the instrument without notice of any defenses or claims against it.

Kris Transfers a Note, on Which Lin Is the Maker