Multiple choice

Holder in due course is

  1. a person who acquires a bill of exchange, in good faith, for value, and before date of maturity

  2. a person who accepts the bill

  3. a person who promises to pay the amount

  4. none of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

 A holder in due course is one, who acquires a bill of exchange in good faith, for value, and before date of maturity. The holder acquires a good title ,even if the title of the transferor, is defective. Suppose B acquires a bill of exchange from A by duping him. B then passes on the bill to C. C is a holder in due course, as he is not aware of what B did to get the bill. C is entitled to receive the payment , and A has no claim against C.

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