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Definition

Holder in Due Course

Holder in Due Course is a holder who takes a bill, complete and regular on the face of it, under the following conditions:

  • that he becomes the holder of it before it was overdue, and without notice that it has been previously dishonoured, if such was the case, and;
  • that he took the bill in good faith and for value, and that at the time the bill was negotiated to him, he had no notice of any

defect in the title of the person who negotiated it

Until the contrary is proved, every holder is deemed to be a holder in due course. This applies to all holders except the original payee as it has been held that he cannot be a holder in due course. The rights of a holder in due course are not affected when the acceptor or other party has been induced to sign the bill by fraud.

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