The holder in due course rule has been limited by various statutes.

Later the holder in due course notion was subject to abuse in consumer transactions.

It says it hopes to formulate a proposal for the holders in due course.

Fraud in the factum usually voids the instrument under state law and is a real defense against even an holder in due course.

Concerns have also been raised that the holder in due course rule does not align the incentives of the mortgage originators and the assignees efficiently.

Article 3 of the Uniform Commercial Code as enacted in a particular State's law contemplate real defenses available to purported holders in due course.

The rights of a holder in due course of a negotiable instrument are qualitatively, as matters of law, superior to those provided by ordinary species of contracts:

However, if the gift was received by a qualifying holder in due course of the same instrument, the shelter rule gives the donee the right to recover on the instrument.

Certain exceptions exist, such as instances of loss or theft of the instrument, wherein the possessor of the note may be a holder, but not necessarily a holder in due course.

When the instrument is transferred in accordance with certain conditions, the holder may become a holder in due course and be free from defenses which would apply to the original payee, such as defective goods or fraud.

The "holder in due course" may claim the amount of the bill against the drawee and all previous endorsers, regardless of any counterclaims that may have disabled the previous payee or endorser from doing so.

The underlying contract contemplates the right to hold the instrument as, and to negotiate the instrument to, a holder in due course, the payment on which is at least part of the performance of the contract to which the negotiable instrument is linked.

Practically, the obligor-payor on an instrument who feels he has been defrauded or otherwise unfairly dealt with by the payee may nonetheless refuse to pay even a holder in due course, requiring the latter to resort to litigation to recover on the instrument.

In the United States, whether a promissory note is a negotiable instrument can have significant legal impacts, as only negotiable instruments are subject to Article 3 of the Uniform Commercial Code and the application of the holder in due course rule.

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within 15 days of the receipt of the said notice.

The instrument itself is understood as memorializing the right for, and power to demand, payment, and an obligation for payment evidenced by the instrument itself with possession as a holder in due course being the touchstone for the right to, and power to demand, payment.

Transfer free of equities-the holder in due course can hold better title than the party he obtains it from (as in the instance of negotiation of the instrument from a mere holder to a holder in due course)

If the recipient of a negotiable interest is a donee (that is, a person who receives by gift), that person would generally not have the rights of a holder in due course - that is, a person who received the instrument for value and without notice of other claims.

In other cases, the contract may be a negotiable instrument in which the person receiving the instrument may become a holder in due course, which is similar to an assignee except that issues such as lack of performance by the assignor may not be a valid defense for the obligor.

The holder in due course must have met the legal requirements of presentation and delivery of the instrument to the maker of a note or acceptor of a draft and must have found that this legal entity has refused to pay for or defaulted in payment of the instrument.

As a response to this, the United States Federal Trade Commission promulgated Rule 433, formally known as the "Trade Regulation Rule Concerning Preservation of Consumers' Claims and Defenses", which "effectively abolished the [holder in due course] doctrine in consumer credit transactions".

The FTC has on occasion invoked the doctrine against oppressive practices that were not antitrust violations and not recognizably deceptive practices, such as the use of the holder in due course rule by retailers catering to the very poor and the practice of mail-order sellers suing consumers in states remote from where they live.