A purchaser cannot become an HDC of an instrument so incomplete that an element of negotiability is lacking.

Question

Quizplus · Accepted Answer

This is because one of the requirements of being a holder in due course (HDC) is that they must have taken the instrument for value, in good faith, and without notice of any defects in the instrument or claims against it. If the instrument is incomplete or lacks an element of negotiability, it may not meet the requirement of being a negotiable instrument and therefore cannot be transferred to an HDC.

A Purchaser Cannot Become an HDC of an Instrument So