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HOLDER IN DUE COURSE

A person who holds a note with a promise to pay the holder (check or promissory note) that was received in good faith and in exchange for something of value (consideration) and who has no knowledge of any wrongdoing or claim against the instrument by a third party. When such occurs, the holder of that instrument is entitled to be paid by the maker of the instrument. This person who holds the note may also be called a bona fide purchaser. A person may provide goods in exchange for a check made out to bearer not knowing that another party has a claim on the check. As such, the holder of the check who took it in good faith is entitled to payment by the maker.

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