Gave a company a post dated check
they without my knowledge gave the check to another company, telling the company that the check is post dated because the goods were not delivered.
the original company went bankrupt and the endorsed company tried cashing the check3 months after the dated check.

the question is can the second company claim holder in due course when in fact they knew the check was gien to company a for future goods.

if the company is not considered a true holder in due course, can you give me some case history for this

Fr_Chuck

I love first year law questions on contracts it appears.
For what purpose was it given to the 2nd company, as payment of debt, for collections or sold ?

avivjud

dear chuck

thats a good question.
in the past when i gave the check to company a they held the check i believe for payment of goods
during the course of the year company b was given the check i guess in case company did not pay.

however company b knew clearly that this check was for goods that i was purchasing from company a.

what i understand in laymans terms a holder of due course means i that i the holder can use the commercial vehicle such as a check becAUSE I BELIEVE THERE IS NOTHING CONTINGENT ON THE CHECK. However if I knew that when i accepted the check, that the check is really valid only after merchandise would be shipped from compony a to my company, would that not make company b not a holder in due course. the reason is, how can you be a holder in due course when in fact you know that the check you are holding are subject to the execution of company a doing a shipment