- 1 Marks
Question
A payee/endorser in possession of a bill that he obtained after giving consideration for it is called:
A. A drawer
B. An accommodation party
C. An assignee
D. A holder for value
E. A trustee
Answer
Answer:
D. A holder for value
Explanation:
A “holder for value” is someone who holds a bill of exchange or other negotiable instruments after giving value or consideration for it. This legal term ensures that the holder has a legitimate right to claim payment on the instrument, provided that it was acquired in good faith. This distinguishes a holder for value from parties such as an accommodation party, who may not have given consideration.
- Tags: Bills of Exchange, Endorser, Negotiable Instruments, Payee
- Level: Level 1
- Topic: Negotiable Instruments
- Series: MAY 2020
- Uploader: Dotse