Question

Compare and contrast Holder in Due Course (HDC) with a Good Faith Purchaser for Value.

Answer 1

Due course is defined as whenever you can make it happen, whenever it is able to be completed, so a holder in due course is when any accepts a payment (check, draft, or note) in exchange or an item of value. Terms of holder in due course cannot be inheritance or anything deemed as a gift, the holder must money/goods for the instrument, and lastly the holder has to take the instrument.

Good Faith Purchaser for value is when a purchaser exchanges money for an item in "good faith" meaning they are unaware of any damages or adverse claims to the item. It can also be related to an "as is" purchase when the buyer understands the terms of buying the purchase and that it may not be refunded for the value in which they paid.