. In order that renunciation of rights by the holder against the principal debtor will discharge the instrument, said renunciation must be: a. Absolute and uncondltional b. l\/lade prior to maturity of the instru ment c. Done verbally d. l\/lade by altering the instrument 22. ln the hands of a holder in due course, not a party to the alteratlon, the instrument may be enforced according to its original ten or except as against the following who are liable on the altered tenor of the instrument: a. First indorser b. Holder in due course c. Su bsequent indorsers d. Holder for value 23.The statement "He took lt in good faith and for value" entails that a. Bad faith requires actual knowledge of the exact truth. b. Purchase of the instrument at a discount does not prevent a holderfrom being a holder in due course. c. Good faith refers to the good faith of the seller of the instrument and not the endorsee ortransferee. d. Good faith is knowledge of facts which tend to show that there was something wrong with the transaction. ANSWERS
Question
. In order that renunciation of rights by the holder against the principal debtor will discharge the instrument, said renunciation must be: a. Absolute and uncondltional b. l/lade prior to maturity of the instru ment c. Done verbally d. l/lade by altering the instrument 22. ln the hands of a holder in due course, not a party to the alteratlon, the instrument may be enforced according to its original ten or except as against the following who are liable on the altered tenor of the instrument: a. First indorser b. Holder in due course c. Su bsequent indorsers d. Holder for value 23.The statement "He took lt in good faith and for value" entails that a. Bad faith requires actual knowledge of the exact truth. b. Purchase of the instrument at a discount does not prevent a holderfrom being a holder in due course. c. Good faith refers to the good faith of the seller of the instrument and not the endorsee ortransferee. d. Good faith is knowledge of facts which tend to show that there was something wrong with the transaction. ANSWERS
Solution
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The correct answer is a. Absolute and unconditional. For a renunciation of rights by the holder against the principal debtor to discharge the instrument, the renunciation must be absolute and unconditional.
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The correct answer is c. Subsequent indorsers. In the hands of a holder in due course, not a party to the alteration, the instrument may be enforced according to its original tenor except as against subsequent indorsers who are liable on the altered tenor of the instrument.
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The correct answer is b. Purchase of the instrument at a discount does not prevent a holder from being a holder in due course. The statement "He took it in good faith and for value" entails that purchasing the instrument at a discount does not prevent a holder from being a holder in due course.
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