A defense of an obligor that may be asserted even against holder in due course.

• A. Personal defense
• B. Real defense
• C. Implied warranty of title
• D. Uniform Commercial Code (UCC)

Answer: (B)

A real defense is a defense that attaches to the instrument itself and can defeat payment even to a holder in due course. In negotiable instruments law, holders in due course normally take free of many defenses, but real defenses override that protection. Examples include forgery, fraud in the execution (the signer didn’t know they were signing the instrument), and alteration of the instrument, as well as other defenses that affect the validity of the instrument itself (such as discharge in bankruptcy). Because these defenses attack the instrument’s validity rather than the underlying contract with the original payee, they can be asserted against a holder in due course. That’s why the correct choice identifies the concept as a real defense. Personal defenses, by contrast, would not defeat a holder in due course, and implied warranty of title or simply naming the Uniform Commercial Code don’t describe the type of defense itself.