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Becoming a Holder

Learn how Article 3 defines the term holder and how a nonholder possessor may acquire a holder’s rights.


When Article 3 refers to a person entitled to enforce the instrument, this means either the instrument’s holder, a nonholder who possesses the instrument and has a holder’s rights, or one who doesn’t possess the instrument but is entitled to enforce it.

In this lesson, we’ll consider how one becomes an instrument’s holder or acquires a holder’s rights.

I. Holder

Under Article 3, a person will be considered the holder of a negotiable instrument if that person has both physical possession of the...