Rights of a Holder in Due Course

To the extent that a holder is a holder in due course he takes the instrument free from COL120106 DIV. 3 COMMERCIAL PAPER

(1)All claims to it on the part of any person; and

(2)All defenses of any party to the instrument with whom the holder has not dealt except

(a)Infancy, to the extent that it is a defense to a simple contract; and

(b)Such other incapacity, or duress, or illegality of the transaction, as renders the obligation of the party a nullity; and

(c)Such misrepresentation as has induced the party to sign the instrument with neither knowledge nor reasonable opportunity to obtain knowledge of its character or its essential terms; and

(d)Discharge in insolvency proceedings; and

(e)Any other discharge of which the holder has notice when he takes the instrument.