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A defining feature of a negotiable instrument is that a bona fide transferee for value:
ATakes it subject to all prior defects
BCannot transfer it further
CGets a title free from defects in the transferor's title
DMust register the transfer
Answer & Solution
Correct answer: C. Gets a title free from defects in the transferor's title
A holder in due course of a negotiable instrument obtains a good title free from defects in the title of prior parties, which is the essence of negotiability.
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