Asked by Brooke Cooper on May 10, 2024
Verified
A person who engages in fraud may not obtain the rights of an HDC.
Fraud
Deceptive action designed to provide an unfair advantage or benefit to the individual or entity committing the fraud.
HDC
Holder in Due Course, a term in negotiable instruments law referring to someone who has acquired a negotiable instrument in good faith for value, with certain protections.
- Recognize the legal implications of fraud and illegal activities on the enforceability of negotiable instruments.
Verified Answer
KM
kartik malhotraMay 16, 2024
Final Answer :
True
Explanation :
A person who engages in fraud to acquire a negotiable instrument cannot become a holder in due course (HDC) because obtaining the instrument through fraudulent means violates the requirement of good faith, which is a key criterion for HDC status.
Learning Objectives
- Recognize the legal implications of fraud and illegal activities on the enforceability of negotiable instruments.