Question

Fine office company employs general construction, inc. (gci), to renovate an office and signs a note for $10,000 payable to gci. gci breaches the contract, but sells the note for $5,000 to happy collection agency, which knows that gci has not performed. happy is an hdc of the note in the amount of
a.$0.
b.$5,000.
c.$10,000.
d.$15,000

Answer 1

Answer:

A: $0

Explanation:

Holder in due course describes a person who has accepted a negotiable certificate in good faith.

It is one of the requirements by law for a holder in due course that it must not be aware of any defaults.

Since Happy Collection Agency knew about the default, it has no claim over the note.