Payment Systems: Who is a Holder in Due Course Podcast

The topic of this podcast is who is a holder in due course, how someone becomes a holder in due course, and why it’s important. This podcast will explain the distinction between the process of becoming a holder and a holder in due course. Like other podcasts in the Payment Systems series, this one also deals with instruments, typically paper checks and promissory notes. While we might not use instruments frequently, checks and promissory notes are still used in many transactions, particularly larger ones. Not only is this a practice issue, but holders in due course are covered in Article 3 of the Uniform Commercial Code, which is tested by a number of states on the bar examination. Holders, particularly when coupled with holders in due course doctrine, are favorites on bar examinations. It is important to try and use the correct terminology so be on the lookout for the following: holder, negotiation, holder in due course, value, good faith, and notice. At the conclusion of this podcast, you should be able to (1) describe who is a holder; (2) describe how a person becomes a holder in due course; and (3) explain why it’s important.