The statement "If fraud was used to induce a person to sign a negotiable instrument, the injured person may use this as a personal defense against any person other than the holder in due course." is false.
Which of the subsequent defences is allowable against any holder?
Real defences work well against HDCs as well as other holders. The following fall under this category: infancy, void obligations, execution fraud, bankruptcy, discharge for which the holder has received notification, unauthorised signatures, and fraudulent changes.
Instead of being a holder, the transferee is an assignee. when a negotiable instrument is transferred from someone other than the issuer to someone who subsequently becomes a holder. An HDC has more rights because some of the arguments that could have been made against the transferor are not applicable to them.
The complete question says:
True/False. If fraud was used to induce a person to sign a negotiable instrument, the injured person may use this as a personal defense against any person other than the holder in due course.
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