Question

Your strategy is to build profit and success while obeying many laws and rules in finance. Under what circumstances must a finance company or bank assist a business operator feeling cheated or dissatisfied in a contract?What qualifies a lender as a holder in due course? Explain the difference between real and personal defenses in financial disputes.

Answer 1

Circumstances that finance company or bank assists a business operator feeling cheated are

(a) Some of the charges to the business are not listed in the contract of a business.

(b) Deductions to minimum earnings promise to business person are fueling the discontent.

(b)Some of the business arbitrary deductions have erased their business

Holders in due course is best qualified by

Legal term for an original or any subsequent holder of a negotiable instruments (check, draft.notes etc) who has accepted it in good-faith and has exchanged something valuable for it.For example anyone who accepts a third party check is a holder in due course.He or she has certain legal rights, and is presumed to be unaware that (if such were the case) the instrument was at any time overdue, dishonored when presented for payment and claims against it, or the party required to pay for a valid reason for not doing so.

Difference between real and personal defense

REAL DEFENSE:

Real defenses are those that are attached to the instrument and are available against all holders,whether in due course or not,but only by the party or parties entitled to raise them

-Minority/incapacity

-Forgery

-Non-delivery of incomplete contracts.

-Material Alteration

-Ultra Vires act of Corporation

-Fraud in Factum or Esse Contacts

-Illegality

-Vicious force or violence

-Discharge in insolvency

PERSONAL DEFENSES :

Personal defenses are available only against the holder not in due couse who stands in privity with the party who is enttitled to set it up or those who are not or do not have the rights of a holder in due course.

-Failue of absence of consideration

-Illegal consideration

-No-delivery of complete contracts

-Conditional delivery of complete instruments

-Fraud in inducement

-Filling up blank not in authority.

-Dureress of intimidation