Which of the Following Is the Result If a Payee

question 72

Multiple Choice

Which of the following is the result if a payee who receives an instrument with missing information completes the missing information in a way that is inconsistent with the intent of issuer, and the instrument has been clearly materially altered?

• A) The person taking the instrument cannot become a holder in due course.
• B) The alteration does not prevent a person taking the flawed instrument from becoming a holder in due course.
• C) There is no effect so long as the payee can establish that he or she did not receive any more consideration than that to which the payee was entitled.
• D) The instrument is considered materially altered, but it only prevents transfer to a holder in due course if the holder in due course had knowledge that the payee had done the alteration.
• E) The instrument is considered materially altered, but it only prevents transfer to a holder in due course if the transferee participated in the material alteration.

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Definitions:

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