Michael Issues a Check to Paula

question 14

Essay

Michael issues a check to Paula.She negotiates the check to Harold as payment for a used television set.Harold has no notice of any claims or defenses and takes the check in good faith.Harold indorses the check and gives it to his son as a birthday present.
a.Is Harold's son a holder in due course? Explain.
b.What rights does Harold's son have with respect to the check? Why? Explain.
c.Assume that Michael has a defense of fraud in the inducement against Paula.Can he use that defense against Harold? Can he use that defense against Harold's son? Explain.

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Definitions:

Management Levels

The hierarchical layers within an organization, typically including top-level, middle, and lower management, each with different responsibilities.

Summarized

Presented in a condensed form that includes main points or highlights, often used to make complex information more accessible.

Value Basis

The method or the initial cost of an investment used for financial reporting and tax purposes.

Unprocessed Wheat

Raw wheat that has not undergone any cleaning, milling, or processing steps.