The purpose of holder-in-due-course status is to impose liability on financial intermediaries for transaction risks. False
A negotiable instrument is taken free of any potential defenses by any party when it is taken in due course by a holder. A holder of a negotiable instrument generally accepts it subject to any claims that might be made against it by any person. Payment in due course occurs when a debtor makes a payment on a negotiable instrument that discharges it, even if the payment is made on or after the instrument's maturity date.
A concept in business law known as the holder in due course (HDC) hypothesis safeguards a debt buyer when the buyer is given the authority to accept debt payments.
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