A holder cannot become an HDC if he or she has notice of any claim to the instrument or defense against it.

Question

Quizplus · Accepted Answer

According to the Uniform Commercial Code, a holder in due course (HDC) is someone who takes possession of a negotiable instrument for value, in good faith, without notice of any claims or defenses against it. If a holder has notice of any claim or defense against the instrument, they cannot become an HDC.

A Holder Cannot Become an HDC If He or She