Edward gives a check to Fund Investments to buy 100 shares of stock in GR8 Tech Corporation. The price of the shares is constantly fluctuating. Fund Investments asks Edward to leave the amount of the check blank and allow it to fill in the price when making the purchase. Edward agrees. Fund Investments buys the stock when the price is $4,000, but fills in the check for $5,000. The check is negotiated as payment for a $5,000 debt to Hasty Accounting Services, which takes the check in good faith and without notice of Fund Investments’ act. Hasty later learns that Fund Investments was not authorized to fill in the check for $1,000 over the price. Is Hasty an HDC? If so, for how much?
Edward gives a check to Fund Investments to buy 100 shares of stock in GR8 Tech Corporation. The price of the shares is constantly fluctuating. Fund Investments asks Edward to leave the amount of the check blank and allow it to fill in the price when making the purchase. Edward agrees. Fund Investments buys the stock when the price is $4,000, but fills in the check for $5,000. The check is negotiated as payment for a $5,000 debt to Hasty Accounting Services, which takes the check in good faith and without notice of Fund Investments’ act. Hasty later learns that Fund Investments was not authorized to fill in the check for $1,000 over the price. Is Hasty an HDC? If so, for how much?
Holder of instrument can be considered as Holder in due course , kif holder took the instrument,
(i) for value
(ii) in good faith
(iii) without notice that the instrument is overdue or has been dishonored or that there is an uncured default with respect to payment of another instrument issued as part of the same series
(iv) without notice that the instrument contains an unauthorized signature or has been altered
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