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THE UNITED STATES UNIFORM
COMMERCIAL CODE SECTION § 3-302 (Holder In Due Course) |
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PROVIDES RELIEF FOR CHECK CASHING MERCHANTS WHO FALL VICTIM
TO: |
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CHECKS, DRAFTS, & WARRANTS |
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Issued by: |
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Companies, Corporations, & Governments,
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that are RETURNED by Banks, for the following reasons: |
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ALTERED FICTITIOUS
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RETURN TO MAKER
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STOP PAYMENT
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FACTS: |
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1-You qualify for “Holder In Due
Course” relief if you did your “Due Diligence” when you
cashed the check. |
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2-The Issue of recovery is
between you and the Maker of the Check, not you and
the Payee. |
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3-The Maker is responsible to make you
whole. |
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4-You can sue the Maker if they fail
to respond to a demand for payment. |
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“HOLDER IN DUE COURSE” |
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Section § 3-302 of the Uniform Commercial Code defines a
holder in due course as “…the holder of an instrument if:
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(1) the instrument when issued or negotiated to the holder
does not bear such apparent evidence of forgery or
alteration or is not otherwise so irregular or incomplete as
to call into question its authenticity; and |
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(2) the holder took the instrument (i) for value, (ii) in
good faith, (iii) without notice that the instrument…has
been dishonored, (iv) without notice that the instrument
contains an unauthorized signature or has been altered… |
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” The UCC allows a holder in due course full transferability
of rights to assure the holder a free market for the
instrument (§ 3-203).
A holder in due course has three years from the date a check
was dishonored
or ten years from the date the check was issued, whichever
period expires first, to sue the maker for recoupment (§
3-118). |
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