Transfer of a Negotiable Instrument

The video tutorial explains the concept of transferring rights, which can be done voluntarily or involuntarily. It highlights that the transferee inherits the same rights as the transferor but is also subject to any defenses the payor might have had against the transferor. The video also introduces the concept of a holder in due course, who has elevated rights if certain conditions are met, and mentions the shelter principle. The tutorial concludes by summarizing the methods and principles of transfer.

What is an example of an involuntary transfer of rights?

• Rights transferred due to fraud

• A transferee purchasing rights

• A transferor willingly signing over rights

• Rights transferred through a gift

What happens to the transferee's rights when they receive an instrument?

• They can only enforce rights if the transferor agrees

• They lose all rights to the instrument

• They receive the same rights as the transferor

• They gain new rights not held by the transferor

Which of the following is true about defenses against a transferee?

• The transferee is subject to the same defenses as the transferor

• Defenses against the transferor do not apply to the transferee

• The transferee is immune to any defenses

• The transferee can only be defended against in court

What is a holder in due course?

• A transferee with elevated rights under certain conditions

• A legal term for involuntary transfer

• A transferor who retains some rights

• A transferee with no rights

What principle allows a transferee to acquire rights of a holder in due course?

• The Defense Principle

• The Voluntary Principle

• The Transfer Principle

• The Shelter Principle