Payment in Due Course

Payment of a Negotiable Instrument at or after its date of maturity, made to its holder in good faith and without notice of any defect in his title.

Payment of a negotiable instrument at or after its date of maturity, made to its holder in good faith and without notice of any defect in title. 10 Williston, Contracts 483 (4th ed. 1990). Under the Uniform Negotiable Instruments Law (§§51, 57) payment in due course would discharge the payor's liability on the note. The Uniform Commercial Code eliminates the "in due course" requirement and discharges the payor upon payment to the holder even though the payor has knowledge of a third party's claim to the instrument. The third party consequently must proceed against the holder, not the payor, for satisfaction of the claim. U.C.C. §3-603 (Comment 3).