Asked by Shaylie Pickrell on Apr 25, 2024
Defenses that may not be asserted against a holder in due course are referred to as personal (or contractual) defenses.
Holder in Due Course
A legal term referring to a party that has acquired a negotiable instrument in good faith and for value and thus has certain protections against defenses and claims that could be asserted against the transferor.
Personal Defenses
Legal arguments or claims that an individual can use personally to avoid enforcement of a contract or legal obligation against them.
Contractual Defenses
Legal arguments that can be used to challenge the enforceability of a contract.
- Identify and differentiate between personal (contractual) defenses and real defenses in the context of negotiable instruments.
Learning Objectives
- Identify and differentiate between personal (contractual) defenses and real defenses in the context of negotiable instruments.