HOLDER IN DUE COURSE

The Uniform Commercial Code sets out standardized rules adopted in all States which have incorporated the UCC into their national regulations. Among the provisions laid down in the UCC are rules which protect debt buyers and protect those assigned the right to receive debt payments. The rules that protect the inheritors or buyers assigned the right to receive debt payments from an original creditor is called the doctrine of the Holder in Due Course (HDC). Understanding the holder 's theory in due course is necessary for everyone in the company who either acknowledges the debtor who claims the debt and tries to recover it. Business attorneys in California at Brown & Charbonneau, LLP will offer legal aid in determining what the concept of the Holder in Due Course entails in the sense of the Uniform Commercial Code and can enable you to recognize your rights and responsibilities under this concept.

The Uniform Commercial Code establishes the holder in due course doctrine in Article 3, which deals with the negotiable instruments. Article 3, Part 3 addresses debt management problems and section 3-302 accounts for the legal concept of a holder in due course. Under UCC Section 3-302, a holder who is entitled to the security of the law and who is entitled to the right to collect debts must have acquired the right to collect the debt (or the right to collect it) while acting in good faith. The holder is required to have a check or other negotiable instrument taken in exchange for the value. The holder must not be told in due course that the debt has been dishonoured or that there has been an "uncured default" in respect of payment. No notice must have been given that the debt instrument signature has been altered or that it has been void, and no notice must have been given that any party has a defence or a recovery claim. In other words, the holder must not have had any reason to presume a problem with the negotiable instrument in due course.

The rules which protect a holder's right to collect on a debt in due course are very important to facilitate business transactions. These rules allow checks to pass from bank to bank without worrying that the check writer may try to claim protection that questions the legitimacy of the right to collect on the debt. For example, when a check is written to someone who then deposits the check, then in due course the depository bank becomes the holder. Creditors must be aware, in due course, of the protections provided by the rules to the holders. Any business that collects payment by check or otherwise acquires a negotiable instrument and wishes to use the legal system to implement debt must also know the laws laid down in the Uniform Commercial Code. California Business Law Attorneys at Brown & Charbonneau, LLP may, in due course, provide legal representation to the holder of the UCC as well as to understand the other requirements and rights of the Uniform Commercial Code.