Exam 26: Transferability and Holder in Due Course

Vicenzo, in good faith and for value, gets from Wren a check "payable to the order of bearer." Vicenzo does not know that Wren stole the check. Vicenzo is​

The good faith requirement applies to both the holder and the transferor.

Estes receives a check from Fleet Trucking Corporation. On the back of the check, Estes writes "pay to Garden Valley Bank only" and signs his name. This is​

Allie signs a check payable to Bess, who indorses the back, gives it to County Credit Union (CCU), and receives cash. The transfer of the check from Bess to CCU is​

Rochelle fraudulently induces Sybil to sign a note. Rochelle sells the note to Terry, who does not know of the fraud and takes the note for value and in good faith, and thus becomes an HDC. Terry sells the note to Ulrich, who sells the note back to Rochelle. Does Rochelle acquire Terry's HDC rights in the note?

When an instrument is transferred by negotiation, the transferee becomes a holder.

Sergio makes a gift of a check to Todd who takes it in good faith and without notice of any claim, defense, or defect. With respect to this check, Todd is​

Talia, who is not a Urban Bank customer, attempts to cash a check drawn on the bank. The check is considered dishonored if Urban Bank​

A bearer instrument can be converted into an order instrument through indorsement.

Ryan negotiates an order instrument to Selina by​

A blank indorsement can consist of a mere signature.

An indorser who does not wish to be liable on an instrument can use a qualified indorsement.

Mort negotiates an instrument to Nadia. Negotiation is the transfer of an instrument​

An instrument is dishonored when the party to whom the instrument is presented refuses to pay it.

Any irregularity on the face of an instrument that calls into question its validity will bar HDC status.​

Gwen signs a check payable to Hart and gives it to him. Hart indorses the back, and transfers the check to Ingrid. To negotiate the check to Jaime, Ingrid must​

Visible evidence that a signature on a check was forged will disqualify a purchaser from HDC status.

A holder takes an instrument for value by promising to perform in the future.

A person who receives an instrument as a gift automatically possesses the rights of a holder in due course.

Berton transfers a draft by signing it and delivering it to Cormac. Berton is​