Nevada § 104.3302 - Holder in due course

§ 104.3302. Holder in due course

1. Except as otherwise provided in subsection 3 of this section and subsection 4 of NRS 104.3106 , “holder in due course” means the holder of an instrument if: (a) 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 (b) The holder took the instrument: (1) For value; (2) In good faith; (3) 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; (4) Without notice that the instrument contains an unauthorized signature or has been

altered; (5) Without notice of any claim to the instrument described in NRS 104.3306 ; and (6) Without notice that any party has a defense or claim in recoupment described in

subsection 1 of NRS 104.3305 . 2. Notice of discharge of a party, other than discharge in an insolvency proceeding,

is not notice of a defense under subsection 1, 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. 3. 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: (a) By legal process or by purchase in an execution, bankruptcy, or creditor's sale

or similar proceeding; (b) By purchase as part of a bulk transaction not in ordinary course of business of

the transferor; or (c) As the successor in interest to an estate or other organization. 4. If, under paragraph (a) of subsection 1 of NRS 104.3303 , 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. 5. 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 which,

at the time of enforcement of the instrument, does not exceed the amount of the unpaid

obligation secured. 6. To be effective, notice must be received at a time and in a manner that gives a

reasonable opportunity to act on it. 7. This section is subject to any law limiting status as a holder in due course in

particular classes of transactions.