A person who receives an instrument as a gift automatically possesses the rights of a holder in due course.

Question

Quizplus · Accepted Answer

A person who receives an instrument as a gift does not automatically possess the rights of a holder in due course, as they did not give value for the instrument. To become a holder in due course, one must acquire the instrument for value, in good faith, and without notice of any defects or claims against it.

A Person Who Receives an Instrument as a Gift Automatically