CHAPTER 25—DEFENSES Key
1. A defense that cannot be used against a holder in due course is known as a _____.
2. Which of the following is a definition of a universal defense?
3. James agreed to remodel Ryan’s house for a specified fee. However, James failed to complete the job
properly and Ryan refused to pay him. James had previously assigned the right to payment to Blake. Which of
the following is legally permissible in this scenario?
4. Mike makes out a check to Vin’s name and delivers it to Ben. However, Mike asks Ben to hold onto to the
check until he receives goods from Vin, but Ben delivers it to Vin who then refuses to supply the goods. Which
of the following is likely to occur in this case?
5. Which of the following is legally permissible in the case of a theft of a negotiable instrument?
6. Which of the following best describes alteration?
7. Which of the following is a scenario where a universal defense can be applied?
8. Joyce gives a check to Chris, a minor, in order to give it to James. However, Chris loses the check. Which of
the following is likely to occur in this scenario?
9. A limited defense can be used against a holder in due course.
10. In general, the defenses available in a dispute over a contract can be raised against holders in due course.
11. When a person knows commercial paper is being executed but is induced to execute it because of false
representations, this is a defense against a holder in due course.
12. Those defenses thought to be so important that they are preserved even against a holder in due course are
called real.
13. A thief can pass good title of an instrument to a holder in due course.
14. Minority is not a defense that can be preserved even against a holder in due course.
15. When a person knowingly executes a negotiable instrument but is persuaded to do so because of false
statements, the defense is a limited one.
16. Even in cases in which the defendant’s negligence made the forgery possible, forgery may be raised
successfully against any holder.
17. All holders are subject to the defense that a discharge in bankruptcy has been granted.
18. When the duress nullifies a contract, the defense is limited.
19. When an alteration is fraudulently made, the party whose obligation is affected by the alteration is
discharged.
20. Explain any two types of hybrid defenses.