Asked by Briana Quist on Jul 06, 2024
Verified
Rafe signs a check payable to Shop Mart, which transfers the note by negotiation to Trans-State Bank. With respect to any defenses to payment on the note that Rafe could have raised against Shop Mart, most likely Rafe can
A) raise those defenses against the bank.
B) no longer present any defense to payment.
C) not assert those defenses against the bank.
D) claim more defenses against the bank than Shop Mart.
Negotiation
The process by which two or more parties communicate back and forth for the purpose of reaching a joint agreement about differing needs or ideas.
Defenses To Payment
Legal arguments or claims that can be used by a debtor to avoid making a payment they are otherwise obligated to.
- Understand the defenses available against claims on negotiable instruments under various circumstances.
Verified Answer
DA
Daniela Alanis De LeonJul 10, 2024
Final Answer :
C
Explanation :
Trans-State Bank, as a holder in due course (assuming it meets the criteria), takes the note free from most claims and defenses that Rafe could assert against Shop Mart. This means Rafe generally cannot assert those defenses against the bank.
Learning Objectives
- Understand the defenses available against claims on negotiable instruments under various circumstances.
Related questions
A Holder in Due Course Is Free from the Following ...
Because a Maker Who Issues an Incomplete Note Will Normally ...
The Destruction or Mutilation of an Instrument Is Considered Cancellation ...
The Lack or Failure of Consideration Is a Personal Defense ...
An Investor Who Signs a Note on Behalf of a ...