To the extent that a holder of a negotiable promissory note is a holder in due course, the holder takes the note free of which of the following defenses?
a. Minority of the maker where it is a defense to enforcement of a contract.
b. Forgery of the maker’s signature.
c. Discharge of the maker in bankruptcy.
d. Nonperformance of a condition precedent.
Answer:D
A holder in due course takes an instrument free of personal defenses but is subject to real defenses.
Answer (d) is correct because it involves a breach of contract or nonperformance of a condition precedent which describes a personal defense.
Answer (c) is incorrect because bank ruptcy is a real defense.
Answer (a) is incorrect because when a minor may disaffirm a contract, it is treated as a real defense.
Answer (b) is incorrect because a forgery of a maker’s or drawer’s signature is a real defense