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Question
Tom gave celebrity Lynnetta Landau a blank sheet of paper and asked her to sign her autograph on it. Then, without Lynetta's knowledge, Tom wrote a promissory note made payable to him for $3,000 above her signature. This kind of fraud is known as fraud:
A. as to the essential nature of the transaction, which may not be used as a defense against a holder in due course.
B. as to the essential nature of the transaction, which may be used as a defense against a holder in due course.
C. in the inducement, which may not be used as a defense against a holder in due course.
D. in the inducement, which may be used as a defense against a holder in due course.
Answer
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