Holder in Due Course - Receive Instrument for Value

The video tutorial explains the concept of a holder in due course, emphasizing the need for the holder to pay value for the instrument. It outlines various forms of value, such as money, assets, services, and the cancellation of existing debts. The tutorial clarifies that future or contingent value, including promises for future services or goods, does not qualify as value. It stresses the importance of current or existing debt as a form of value and distinguishes it from future obligations, which are merely contract rights and not present value.

What forms of value can a holder in due course provide for an instrument?

• Only cash payments

• Any form of money, assets, or services

• Future promises of service

• Contingent obligations

Which of the following is NOT considered a valid form of value for an instrument?

• Providing a service

• Cancellation of an existing debt

• Payment in cash

• A promise to deliver goods in the future

Why can't future promises be considered as value for an instrument?

• They are not legally binding

• They are too complex

• They are not current or existing

• They are too valuable

What distinguishes present value from future obligations in the context of negotiable instruments?

• Future obligations are easier to enforce

• Present value exists at the time of the transaction

• Future obligations are more reliable

• Present value is always monetary

In the context of negotiable instruments, what is considered a form of value?

• A verbal agreement

• An existing debt

• A future service

• A promise to pay in the future