payment in due course
n. the giving of funds to the holder of a promissory note or bill of exchange when due, without any knowledge that the document had been acquired by fraud or that the holder did not have valid title. The true owner of the bill or note cannot also demand payment, but must look to the recipient of the funds. (See: holder in due course)
Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
payment in due course payment made at or after the maturity of a BILL OF EXCHANGE to the holder of the bill by a payer in good faith and without notice that the holder's title might be defective. A bill is discharged by payment in due course by or on behalf of the drawee or acceptor. When a bill is paid by the drawer or indorser it is not discharged and the party paying may have rights on it.
Collins Dictionary of Law © W.J. Stewart, 2006