Which of the following is true with respect to the law of negotiable instruments?
A)The Bills of Exchange Act is controlled by both federal and provincial legislation.
B)A holder in due course is in a better position than he or she would be as the receiver of contractual rights through assignment.
C)A bill of exchange involves two parties.
D)The Bills of Exchange Act governs the area of bankruptcy and insolvency.
E)Negotiable instruments are controlled by provincial legislation.

Question

Quizplus · Accepted Answer

A holder in due course is someone who has taken possession of a negotiable instrument for value, in good faith, and without knowledge of any defects in the title. This person is given special legal protections and can enforce the instrument against the original parties to the transaction, as well as any subsequent parties who have received the instrument. This is a better position than simply receiving contractual rights through assignment, as the holder in due course has greater legal rights and protections. The other choices are incorrect: A) The Bills of Exchange Act is federal legislation only; C) A bill of exchange involves three parties (drawer, drawee, and payee); D) The Bills of Exchange Act does not govern bankruptcy and insolvency; E) Negotiable instruments are controlled by federal legislation, not provincial.

Which of the Following Is True with Respect to the Law