In most instances, a payee on a note will qualify as an HDC by virtue of the fact that he or she has dealt directly with the maker.

Payee

The individual or entity to whom a payment is to be made or who receives the payment.

HDC

Stands for Holder in Due Course, referring to a party that has acquired a negotiable instrument in good faith and for value, thus having certain rights above the original parties.

Note

A written record or reminder, often used in contracts or financial transactions to denote terms, obligations, or agreements.