CHAPTER 36: HOLDERS IN DUE COURSE AND DEFENSES

Learning Objectives:• Holder in Due Course

Significance Requirements

• Defenses Personal Real

• Exceptions to Holder in Due Course Status

Chapter 36 2

CHAPTER 36: HOLDERS IN DUE COURSE AND DEFENSES

1. Significance of the Designation2. Requirements:

a. Holder must receive valueb. Good faithc. Transferee does not have notice of

infirmities i. Types of Noticeii. Before Overdue

d. Holder from a HolderChapter 36 3

HOLDER IN DUE COURSE

1. Personal Defensesa. Significance: Holder in due

course is not subject to personal defenses

b. Examples

Chapter 36 4

DEFENSES

2. Real Defensesa. Significance: Holder in due

course is subject to real defenses

b. Examples

Chapter 36 5

DEFENSES

1. Rationale for Exceptions2. State Law3. Federal Law

a. FTC Rule Regarding Consumer Credit

b. Close Connectedness Doctrine

Chapter 36 6

EXCEPTIONS TO THE HOLDER-IN-DUE COURSE STATUS

CHAPTER 36: HOLDERS IN DUE COURSE AND DEFENSES