Chapter 21 Holder in Due Course and Defenses

Learning Objectives

After reading this chapter, you should understand the following:

  1. What a holder in due course is, and why that status is critical to commercial paper
  2. What defenses are good against a holder in due course
  3. How the holder-in-due-course doctrine is modified in consumer transactions

In this chapter, we consider the final two questions that are raised in determining whether a holder can collect:

  1. Is the holder a holder in due course?
  2. What defenses, if any, can be asserted against the holder in due course to prevent collection on the instrument?