Asked by zartasha kousar on Jul 20, 2024
Verified
A party cannot be a holder in due course of a non-negotiable instrument.
Holder in Due Course
A person who has acquired a negotiable instrument in good faith and for value, thus having certain legal protections.
Non-negotiable Instrument
A financial document whose terms cannot be altered or transferred in favor of someone other than the stated payee.
Holder
In a financial context, a person or entity that possesses or owns a negotiable instrument, like a check or bond, and has the right to enforce the instrument.
- Understand the concept of negotiability and the characteristics that make an instrument negotiable.
Verified Answer
MS
Manpreet SinghJul 26, 2024
Final Answer :
True
Explanation :
A holder in due course status applies only to negotiable instruments, which must meet specific requirements under the law. Non-negotiable instruments do not qualify for this status.
Learning Objectives
- Understand the concept of negotiability and the characteristics that make an instrument negotiable.