A holder in due course of a negotiable instrument generally takes rights that are free from which type of defenses?

• A. They take rights subject to all defenses
• B. They take the same defenses as the prior holder
• C. They take rights free from personal defenses against the instrument
• D. They cannot sue the maker at all

Answer: (C)

Holders in due course are protected from defenses that arise from the underlying contract between the original parties. These are personal defenses—things tied to the contract between the maker/drawer and the original holder. An HDC takes the instrument free from those personal defenses, which means they can enforce payment even if the signer would have a defense against the original holder. They are still subject to real defenses (like fraud in the inception or lack of capacity), but not to the typical contract-based defenses that would have troubled the original holder. This is why the best answer says the holder takes rights free from personal defenses against the instrument. The other ideas—being subject to all defenses, taking the same defenses as the prior holder, or not being able to sue the maker—don’t fit the protections granted to an HDC.