LexisNexis ( October 19, 2017, 12:59 PM EDT) -- The holder in due course rule, which dates back centuries, allows a bona fide purchaser of a negotiable instrument to take the instrument free of claims and defenses. A common example is a check given for an underlying obligation such as the sale of goods. The payee of the check deposits it and takes off with the funds before the item has a chance to clear. When the drawer of the check discovers that the goods are defective, it immediately stops payment on the item. The check is dishonored and bounces back to the bank of first deposit, which can't charge it back against the payee's account because the payee has taken off for parts unknown. ...