holder in due course

Definition of "holder in due course"
  1. An individual holding a check or promissory note without suspicion of it being claimed by another party or previously dishonored and having obtained it in good faith in return for value
How to use "holder in due course" in a sentence
  1. The bank, as a holder in due course, had no knowledge of the disgruntled business partner's claim against the note.
  2. Despite buying the promissory note in an auction, John was still considered a holder in due course as he had no reason to suspect any claim against it.
  3. The law provides protection to a holder in due course because the note they hold was acquired without knowing it had been dishonored before.

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