Exam 26: Transferability and Holder in Due Course

An instrument payable to two or more persons in the alternative, such as a check "payable to the order of Elena or Ferrar,"

With a few exceptions, anyone who can ultimately trace his or her title to an instrument back to an HDC can acquire the rights and privileges of an HDC.

A person can become an HDC only if he or she knows or has reason to know that an instrument is defective and is willing to assume the risk of its dishonor.

The authorized representative of an entity can negotiate an instrument payable to the entity only if the item has been converted into a bearer instrument.

Resources Inc. receives a check from Steel Products Company and indorses it with a stamped imprint of its name on the back. This converts the check to

A payee or indorsee whose name is misspelled on an instrument

Dani signs a note payable to Equity Credit, which transfers the note by assignment to Finance Collection. With respect to any defenses that Dani could have raised against Equity, most likely Dani can

A check "payable to the order of Laura" is indorsed in blank if Laura simply delivers it without signing it.

If a check is made "payable to the order of Marcus or Nathan," both parties' indorsements are necessary for negotiation.

Emil writes and signs a check payable to "Film Arts Cinema." George, Film Arts' manager, indorses the check "For deposit only." This is

Hedy draws a check "payable to the order of Ilsa or Jeto" and gives the check to Ilsa. Hedy's obligation on the check to Jeto is

In the event that there is a conflicting, superior claim to an instrument, a holder in due course will not be able to collect payment.