Under the Uniform Commercial Code's ________ requirement, a person cannot qualify as a holder in due course (HDC) if he or she has noticed that the instrument is overdue.
A) no evidence of forgery, alteration, or irregularity
B) taking in good faith
C) taking without notice of defect
D) taking for value

Question

Quizplus · Accepted Answer

The requirement that a person must take an instrument without notice of any default, defect, or wrongdoing in connection with the instrument is known as the "without notice of defect" requirement. If a person has notice that an instrument is overdue, then that person cannot be considered a holder in due course, even if all other requirements are met. Therefore, choice C is the best option. Choices A, B, and D refer to other requirements of being a holder in due course but are not relevant to this particular issue.

Under the Uniform Commercial Code's ________ Requirement, a Person Cannot