A quick reading might indicate an affirmative answer to this question. The comments to Section b 20 state: To the old, subjective good faith, "honesty in fact" standard, the legislature added an objective component—the "pure heart of the holder must now be accompanied by reasoning that assures conduct comporting with reasonable commercial standards of fair dealing.
Any Kind Checks Inc. However, a detailed reading of this clause, coupled with the comments and the opinions of experts in the field, create the possibility that even under the amended definition a strong argument can be made that complying with the amended definition does not require that a party act in a commercially reasonable manner as regards to the substantive transaction, but simply that the person behave in a manner which would be considered to comply with a commercial standard of fairness.
This challenges the statement in Any Kind Check Cashing noted earlier where the court stated: As the court in the Any Kind Check Cashing case noted: Many have assumed that this requires that persons involved in UCC transactions act honestly and in a commercially reasonable manner.
No longer may a holder of an instrument act with "a pure heart and an empty head and still obtain holder in due course status. Before one concludes that the banks described in the preceding paragraphs are not in good faith, return to the definition.
Sun Life Assurance Co. Friday, July 24, Good Faith: The conclusion that commercial reasonableness is not required is further supported by explicit reference in other Code sections to a requirement of commercial reasonableness.
This is an entirely different concept that whether a party exercised ordinary care in conducting a transaction. Clearly, if the drafters were looking for commercial reasonableness, they would have explicitly said so.
Commercial Reasonableness or Fairness? It appears from the text, the comments and recognized UCC experts that commercial reasonableness in the conduct involved is not required. The basic question in this analysis is simple:I. ACQUIRING HOLDER IN DUE COURSE STATUS UCC (which deals with bank collection) sets out special rules for this kind of value.
Section provides that for purposes of determining its holder in due course status, a bank gives value whenever it has a security $1, check in his account, the account contains $ Later that.
Checks ‘R Us paid good money for the original paycheck and appears to have accepted the original paycheck in good faith, without notice of any claim or defense, so it is likely a holder in due course.
Any Kind Checks and HDC Status Essay examples Andres Bocanegra MBA Q January 4, Short Paper – Any Kind Checks and HDC Status Several factors come into play when considering the fairness of the court’s ruling in this case. Any Kind has an obligation to act not only in good faith, but in fair dealing with consideration to all parties involved in order to maintain their status as an HDC.
The reason Any Kind Checks does not attain HDC status in the transaction with the $10, check is because they failed to act with fairness to all of the participants to the. In this case, reasonable commercial fairness required Any Kind to approach the $10, check with some caution and to verify it with the maker if it wanted to preserve its holder in due course status.
Jul 24, · No longer may a holder of an instrument act with "a pure heart and an empty head and still obtain holder in due course status. Any Kind Checks Inc.
v Talcott So. 2d (4 th District Court of Appeals, FL, ). atDownload