A Claim in Recoupment

question 6

Multiple Choice

A claim in recoupment:

• A) is a claim of the original payee against the obligor of the instrument.
• B) must arise from the transaction that gave rise to the instrument.
• C) is actually not an offset to liability, but a defense to an instrument.
• D) can make a person a holder in due course even if he knows about it before the negotiation.

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Definitions:

Transfer Price

The selling price for goods and services among different segments within the same enterprise.

Idle Capacity

Unused production capability or facilities that could be producing goods or services but are currently not due to lack of demand or inefficiency.

Connector Division

A segment or department within a company that specializes in producing connectors, often seen in electronics and manufacturing firms, aiming to enhance operational efficiency and product specialization.

Minimal Acceptable

The lowest standard or level that is considered satisfactory or acceptable.