Bill decided that it was time to remodel his home. Among the ...

[ishan]

Bill decided that it was time to remodel his home. Among the features that Bill had included in his remodeling plan was the addition of several very large picture windows. Because of the great expense of the windows, Bill financed the cost through the issuance of a promissory note. The manufacturer of the windows sold the promissory note to a bank. Just after the promissory note matured, the windows began to leak badly. Bill refused to pay on his promissory note and brought action against the manufacturer for breach of contract. Will the bank recover on the promissory note?

Question 2

A posthumous heir is one born after the death of the intestate.
  Indicate whether the statement is true or false

[mjbamaung]

Answer to Question 1

The bank will recover from Bill on the promissory note. Because the bank was the first transferee, the status of a holder through a holder in due course is unavailable. However, the bank probably meets the requirements of a holder in due course. Arguably, value was given for the promissory note, and it was probably an arm's-length transaction indicating good faith. It also appears that the bank had no notice of the defect. Given the bank's holder in due course status, the argument of breach of contract will not be effective, for it is a limited defense that is not available against a holder in due course.

Answer to Question 2

TRUE