A is corrent because according to Article 3 of the UCC, in order for a holder to achieve holder in due course status, he must give executed value in exchange for the negotiable instrument. Future consideration is not considered to be adequate value in determining whether a person is a holder in due course. The consideration must be performed to qualify as executed value.
B is incorrect because the taking of a negotiable instrument as security for a loan will constitute executed value in determining whether a holder is a holder in due course. In this situation the holder will be deemed to have given value to the extent of the debt being secured.
C is incorrect because the exchange of one negotiable instrument for another constitutes the giving of executed value in determining whether a person is a holder in due course.
D is incorrect since the negotiable instrument is being given in exchange for services which have already been performed; thus, executed value in the form of completed services has been given in exchange for the instrument.
|
