If a person purchasing an instrument does not know and has no reason to know that it has been dishonored,the person cannot become an HDC.

Question

Quizplus · Accepted Answer

A person can become a Holder in Due Course (HDC) if they take the instrument for value, in good faith, and without notice of any defect or dishonor. If they do not know and have no reason to know of the dishonor, they can still qualify as an HDC.

If a Person Purchasing an Instrument Does Not Know and Has