Section 29Part 2 — Bills of Exchange
Holder in due course
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A holder in due course is a holder who has taken a bill, complete and regular on the face of it, under the conditions —
that the holder became the holder of it before it was overdue, and without notice that it had been previously dishonoured, if such was the fact; and
that the holder took the bill in good faith and for value, and that at the time the bill was negotiated to the holder the holder had no notice of any defect in the title of the person who negotiated it.
The title of a person who negotiates a bill is defective, within the meaning of this Act, when that person obtained the bill, or the acceptance thereof, by fraud, duress, force, fear, unlawful means or for an illegal consideration, or when that person negotiates it in breach of faith, or under such circumstances as amount to a fraud.
A holder (whether for value or not) who derives that holder’s title to a bill through a holder in due course, and who is not themselves a party to any fraud or illegality affecting it, has all the rights of that holder in due course as regards the acceptor and all parties to the bill prior to that holder.
Defined Terms
holder in due course