Jon Is a Holder in Due Course of a Negotiable

question 95

Multiple Choice

Jon is a holder in due course of a negotiable instrument and gives the instrument to Sarah as a Valentine's Day gift.

• A) Sarah is a holder in due course.
• B) Sarah is not a holder in due course but has the rights of a holder in due course.
• C) Personal defenses would be successful against Sarah.
• D) Sarah has become the payee of the instrument.
• E) Anyone Sarah transfers the instrument to becomes a holder in due course.

---

Definitions:

Breach of Contract

An act of failing to fulfill the terms agreed upon in a contract, leading to legal action for enforcement or damages.

Rare Disease

A rare disease is a health condition that affects a small percentage of the population, often lacking sufficient medical knowledge and treatment options due to its rarity.

Negligence

The failure to exercise a level of care that a reasonably prudent person would under similar circumstances, leading to harm or damage.

Damages

Compensation or monetary award given to a party in a legal action for injury or loss caused by the wrongdoing of another.