Question

A “Holder in Due Course” of a negotiable instrument

• A. Cannot sue on the instrument in his own name
• B. Can sue on the instrument in his own name
• C. Can sue only if permitted by the competent court of law
• D. Can sue on the instrument if permistted by the payee

Answer 1

Answer:

B. Can sue on the instrument in his own name

A holder in due course gets a better title and can sue in his own name.A Holder in Due Course (HDC) is someone who acquires a negotiable instrument (like a check, promissory note) in good faith, for value (consideration), and without notice of any defects in the title before it's overdue, giving them superior legal rights to enforce payment, even if there are issues with the original transaction. They are essentially protected from hidden claims, meaning they can demand payment from the issuer and prior parties regardless of past problems, unlike a regular "holder