3/14/2023 0 Comments Holder and holder in due courseAn instrument is more valuable to the holder if it is negotiable. (A forger of paper cannot be a holder, while a thief of bearer paper can be a holder). Recall that negotiation requires voluntary or involuntary transfer of the instrument and, if the instrument is order paper, indorsement by the payee. A holder may be the original recipient (issuee) of the instrument from the maker or drawer or the issuee may transfer or negotiate the instrument to a third party who becomes holder. Recap: As discussed above, the holder of an instrument is someone who possesses and is entitled to receive payment of an instrument. That is, the holder of a negotiable instrument is elevated to a higher status than that of a simple holder if she qualifies as a holder in due course (HDC). If certain conditions are met, a holder of a negotiable instrument may further elevate her rights to enforcement (receive payment) of the negotiable instrument. Update Table of Contents What is a holder in due course? What are the Benefits of Being a Holder in Due Course? Discussion Question Practice Question Academic Research What is a holder in due course?
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