How does one become a "holder in due course"?
What will be an ideal response?
In order to become a holder in due course, a person who takes a negotiable instrument must be a holder, and take the instrument:
(1) for value;
(2) in good faith;
(3) without notice that it is overdue or has been dishonored or that there is any uncured default with respect to payment of another instrument issued as part of the same series;
(4) without notice that the instrument contains an unauthorized signature or has been altered;
(5) without notice of any claim of a property or possessory interest in it;
(6) without notice that any party has any defense against it or claim in recoupment to it.
In addition, Revised Article 3 of the Uniform Commercial Code requires "that the instrument when issued or negotiated to the holder does not bear such apparent evidence of forgery or alteration or is not otherwise so irregular or incomplete as to call into question its authenticity."
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