Asked by Vaden Mangler on Jul 07, 2024

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Duress that causes the transfer of a negotiable instrument:

A) prevents its negotiation.
B) is a good defense against a holder in due course of the instrument.
C) is subject to rescission before the instrument is transferred to a holder in due course.
D) is a good defense against the maker of a note.

Duress

Compulsion, force, or pressure to perform an act or make a decision against one's will.

Transfer

The act of moving or conveying property, title, or rights from one entity or person to another.

Negotiable Instrument

A document in writing that ensures the payment of a certain sum of money, either when requested or at a predetermined date, with the document explicitly naming the individual responsible for payment.

  • Recognize the available defenses against claims made on negotiable instruments, covering both real and personal defenses.
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Verified Answer

AP
Anthony PiazzaJul 14, 2024
Final Answer :
C
Explanation :
Negotiation is effective to transfer an instrument even if the negotiation is obtained by fraud,duress,or mistake of any kind.A negotiation made under these circumstances is subject to rescission before the instrument has been negotiated to a transferee who can qualify as a holder in due course or a person paying the instrument in good faith and without knowledge of the factual basis for rescission or other remedy.