holder in due course

  

Definition

Legal term for an original or any subsequent holder of a negotiable instrument (check, draft, note, etc.) who has accepted it in good-faith and has exchanged something valuable for it. For example, anyone who accepts a third-party check is a holder in due course. He or she has certain legal rights, and is presumed to be unaware that (if such were the case) the instrument was at any time overdue, dishonored when presented for payment, had any claims against it, or the party required to pay it has valid reason for not doing so. Also called protected holder, or bona fide holder for value.

Use this term in a sentence

  • I was the holder in due course, so I had a role to fulfill and it made me kind of angry cause I was forced into it.

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  • You may want to make sure that you know how a deal will play out if you plan on being the holder in due course.

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  • The holder in due course was responsible at this point in the business project so we contacted their office immediately.

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