- Alaska Statutes.
- Title 45. Trade and Commerce
- Chapter 3. Negotiable Instruments
- Section 302. Holder in Due Course.
previous: Section 301
. Person Entitled to Enforce Instrument.
next: Section 303
. Value and Consideration.
AS 45.03.302. Holder in Due Course.
- (a) Subject to (c) of this section and AS 45.03.106
(d), "holder in due course" means the holder of an instrument, if
- (1) the instrument when issued or negotiated to the holder does not bear such apparent evidence of forgery or alteration
or is not otherwise so irregular or incomplete as to call into question its authenticity; and
- (2) the holder took the instrument
- (A) for value;
- (B) in good faith;
- (C) without notice that the instrument is overdue or has been dishonored or that there is an uncured default with respect
to payment of another instrument issued as part of the same series;
- (D) without notice that the instrument contains an unauthorized signature or has been altered;
- (E) without notice of any claim to the instrument described in AS 45.03.306; and
- (F) without notice that any party has a defense or claim in recoupment described in AS 45.03.305
- (b) Notice of discharge of a party, other than discharge in an insolvency proceeding, is not notice of a defense under (a)
of this section, but discharge is effective against a person who became a holder in due course with notice of the
discharge. Public filing or recording of a document does not of itself constitute notice of a defense, claim in
recoupment, or claim to the instrument.
- (c) Except to the extent a transferor or predecessor in interest has rights as a holder in due course, a person does not
acquire rights of a holder in due course of an instrument taken by legal process or by purchase in an execution,
bankruptcy, or creditor's sale or similar proceeding, by purchase as part of a bulk transaction not in the ordinary
course of business of the transferor, or as the successor in interest to an estate or other organization.
- (d) If, under AS 45.03.303
(a)(1), the promise of performance that is the consideration for an instrument has been partially performed, the holder
may assert rights as a holder in due course of the instrument only to the fraction of the amount payable under the
instrument equal to the value of the partial performance divided by the value of the promised performance.
- (e) If the person entitled to enforce an instrument has only a security interest in the instrument and the person obliged
to pay the instrument has a defense, claim in recoupment, or claim to the instrument that may be asserted against the
person who granted the security interest, the person entitled to enforce the instrument may assert rights as a holder
in due course only to an amount payable under the instrument that, at the time of enforcement of the instrument, does
not exceed the amount of the unpaid obligation secured.
- (f) To be effective, notice must be received at a time and in a manner that gives a reasonable opportunity to act on it.
- (g) This section is subject to any law limiting status as a holder in due course in particular classes of transactions.
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