Liability of prior parties to holder in due course
Full Text
Liability of prior parties to holder in due course.—Every prior party to a negotiable instrument is liable thereon to a holder in due course until the instrument is duly satisfied.
Plain English Summary
Makes all prior parties to a negotiable instrument (maker, drawer, acceptor, and endorsers) liable to a holder in due course until the instrument is fully paid.
Key Legal Elements
- Every prior party of a negotiable instrument is liable
- Liability is towards a holder in due course
- Liability continues until the instrument is duly satisfied
Practical Note
Strong protection for holders in due course. A holder in due course can sue any or all prior parties (jointly or severally) to recover the money. Prior parties cannot raise defenses based on personal disputes or defects of title between themselves against a holder in due course.
हिंदी पाठ
यथाविधि धारक के प्रति पूर्ववर्ती पक्षों का दायित्व।—परक्राम्य लिखत का प्रत्येक पूर्ववर्ती पक्ष (prior party) यथाविधि धारक (holder in due course) के प्रति उस लिखत पर तब तक उत्तरदायी रहता है जब तक कि लिखत का विधिवत भुगतान (उन्मोचन) न हो जाए।