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Simple English definitions for legal terms
bona fide holder for value
Read a random definition: Garner doctrine
A quick definition of bona fide holder for value:
A bona fide holder for value is someone who has received a negotiable instrument in exchange for something valuable, such as money or property. This person has a legal right to the instrument and can enforce it against the original issuer or any other party involved. Examples of valuable exchanges include taking out a loan or receiving payment for a debt.
A more thorough explanation:
A bona fide holder for value is a person who has given something of value in exchange for a negotiable instrument. This means that they have either acquired a security interest in the instrument or accepted the instrument as payment for a debt that was owed to them.
For example, if someone takes out a loan and uses a promissory note as collateral, the lender becomes a bona fide holder for value because they have given money in exchange for the negotiable instrument. Similarly, if a business accepts a check as payment for goods or services that were already provided, they become a bona fide holder for value because they have accepted the check in exchange for an antecedent claim.
The concept of a bona fide holder for value is important in the world of finance because it provides legal protection to those who have acquired negotiable instruments in good faith. If a negotiable instrument is later found to be fraudulent or invalid, a bona fide holder for value may still be able to enforce the instrument and collect on it.