The Holder in Due Course Rule

question 26

Multiple Choice

The Holder in Due Course rule:

• A) alters statutes of limitations or other state-created limitations on the consumer's enforcement of claims and defenses.
• B) states that all defenses available to the purchaser against the seller are also available against the holder in due course.
• C) eliminates rights that the consumer may have as a matter of federal, state, or local law.
• D) creates a warranty claim or defense where the product is sold "as is."

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Definitions:

Conversion

The unauthorized act of possessing or disposing of someone else's property as if it were one's own, infringing the owner's rights.

Cashed Check

A check that has been presented to a bank or financial institution and exchanged for the equivalent amount in cash, indicating the check has been successfully processed.

Presentment Warranty

A guarantee made to the person who accepts or pays a negotiable instrument that certain facts are true as of the date of its transfer.

Alteration

A change or adjustment made to something, which can modify its appearance, function, or condition.