If the instrument is order paper, how can a person become a holder?
A) Transfer of its possession.
B) Its indorsement by the appropriate parties.
C) Both a t ransfer of its possession and it s indorsement by the appropriate parties are necessary.
D) None of these.

Question

If the instrument is order paper, how can a person become a holder?
A) Transfer of its possession.
B) Its indorsement by the appropriate parties.
C) Both a t ransfer of its possession  and it s indorsement by the appropriate parties  are necessary.
D) None of these.

Quizplus · Accepted Answer

In order for a person to become a holder of an order paper, both a transfer of its possession and its endorsement by the appropriate parties are necessary. This is stated in the UCC (Uniform Commercial Code) section 3-201. Without both of these actions, one cannot be considered a holder of the instrument.

If the Instrument Is Order Paper, How Can a Person