Asked by Julianna Goulais on Jun 01, 2024
Verified
Because a maker who issues an incomplete note will normally be liable for payment even if the note is later completed in an unauthorized manner, the alteration can be claimed as a defense against an HDC.
Incomplete Note
A financial or promissory note missing essential details, making it unenforceable or incomplete until the information is furnished.
Unauthorized Manner
Refers to actions or operations carried out without official permission or approval.
HDC
Holder in Due Course, a term in commercial law referring to a person who has acquired a negotiable instrument in good faith and for consideration, and thus has certain rights above the original parties.
- Become familiar with the rights and countermeasures available against charges on negotiable instruments.
Verified Answer
AR
Angelina RaindanceJun 01, 2024
Final Answer :
False
Explanation :
A maker of an incomplete note who is liable for its unauthorized completion cannot claim alteration as a defense against a holder in due course (HDC), as the HDC takes the note free of this defense.
Learning Objectives
- Become familiar with the rights and countermeasures available against charges on negotiable instruments.