Defenses

Defenses in the United States

Personal and Real Defenses

Personal defenses include conditional or equitable defenses, and are good when pleaded by a person as against his immediate successor, or as against someone who is not a holder in due course.

The real or absolute defenses attack the instrument itself and strike at the very foundation of the contract. The real defenses are good against all the world.

Personal defenses are defenses not necessarily attached to or inherent in the instrument. They include defenses such as fraud, threats or violence, illegality where the illegality does not void the contract, re lease, want of title in the person transferring, renunciation of claim or payment, want or failure of consideration, and others.

2. Fraud and threats of enters where a person is induced to act by some misrepresentation or untrue statement intentionally made for the purpose. Violence or fear and threats, commonly included under the word duress, will vitiate a con tract. Thus a note given to a person in consequence of threats to prosecute the maker for forgery and obtaining money under false pretenses, cannot be re covered. by such person. So, too, where a defend ant’s son had committed forgery, and the notes sued upon were given to the plaintiff to prevent the scandal becoming public, they were held to be void. But it has been ‘held that where a master gave a female servant his note for $1,500 over and above her wages, on condition that she would not marry but would re main in his service as long as he wanted her to, the note was not void for being in restraint of marriage for an unreasonable period.’ It has also been held that where a creditor secured secretly _the notes of the insolvent for the balance of his claim, this was a fraud on the indorsers of the composition notes, and they were entitled to the benefit of this payment. And again, where an illiterate man thought that he was making his mark to a receipt and the plaintiff concealed the fact that it was really a promissory note, the plaintiff could not recover. It has been held, how ever, that where an educated man admits his signature but sets up such a defense, lie must make very clear proof.

_3. Partial or total want of value or consideration.— Valuable consideration for a bill or note may be con stipulated by any consideration sufficient to support a simple contract. It may be an antecedent debt or liability. Every party whose signature appears on a bill or note is presumed to have become a party to it for valuable consideration, but he may prove the contrary. If a total failure of consideration is proved, and the plaintiff and defendant are immediate par ties, the defense is good, or if they are remote parties it is good, if value has not been given for the bill. A total failure of consideration is in its effects like an original want of consideration. There would be a total failure of consideration where a person under took to sell a certain thing to another, and it turned out that he had absolutely no title to the thing. It has been held that where a note was given for logs, on condition that no claim should be made for the logs, and they were revendicated (that is, seized at the instance of the owner for non-payment, etc.), there was a total failure of consideration, and the note became null. There may be only partial failure of consideration. It is probable that in most of the provinces, partial failure may be set up as a defense to the extent of the consideration that is lacking.

4. the consideration be illegal in whole or in part, the bill is none the less altogether void. Considerations are said to be illegal which violate the of morality, are prohibited by law, or are contrary to public policy. Nor will the illegality be cured by renewing or by substituting a new instrument for the old. Thus an agreement not to proceed in a prosecution for permitting unlawful gambling in a tavern, is an illegal consideration for a note. A note given to raise money for corrupt pur poses at an election where the maker was a candidate, is null. The plaintiff cannot recover on a promissory note given by the proprietor of a bucketshop, in settlement of speculative transactions between them.’ . Release, renunciation or bill is dis charged by payment by or on behalf of the drawee or indorser. Payment in due course means payment made, at or after maturity of the bill, to the holder thereof, in good faith, and without notice that his title to the bill is defective. Payment is what the holder accepts or recognizes as such.

It is the discharge of a contract to pay money; but payment need not be a payment of money: it may be a payment of goods, or any other thing which the creditor is willing to accept. But to have the effect of discharging a bill, payment must be made at or after maturity and must be made to the holder, that is, the payee, indorsee or the bearer. If an endorsement is forged or is not authorized, the bill is not discharged, and the acceptor is not released. It has been held that a renewal bill or note does not discharge the original, unless the par ties have so agreed. Payment before maturity does not discharge the bill. The holder may still negotiate it. An accommodation bill is discharged if paid in due course by the party accommodated. Where the acceptor of a bill becomes the holder of it in his own right at or after maturity, the bill is discharged. When the holder of a bill, at or after its maturity, actually or unconditionally renounces his rights against the acceptor, the bill is discharged. The holder may renounce the liabilities of any party to a bill before, at or after maturity. A renunciation must be in writing, however, unless the instrument is delivered up to the debtor.

6. Discharge of persons secondarily we have seen, the maker of a note and the acceptor of a bill are primary debtors. Drawers and indorsers are only secondarily liable. A discharge of a debtor op erates as a discharge to parties who are liable to pay only if he fails to pay. Thus if the holder discharges the maker of note, he cannot hold the indorser, be cause by releasing the maker he is depriving the in dorser of his chance to collect from the maker.

7. Real we have already explained. real defences strike at the root of the contract. Where the contract, by reason of the minority or in sanity of the maker of a note, could not be entered into, the contract on the note never existed. Thus a note giVen in satisfaction of a gambling contract would be void. An instrument if materially altered without the assent of all parties liable on it is voided, except as against a party who himself has made, au thorized or assented to the alteration, or subsequent indorsers; but if the alteration is not apparent, a holder in due course may enforce payment of it, ac cording to its original tenor, as tho it had not been altered. The defence of payment at or after maturity is also a real defence.

8. holder may convert a blank in dorsement into a special indorsement; he may also strike out one or more blank indorsements, in which case any indorser subsequent to one struck out is dis charged. A holder or his agent may intentionally cancel a bill or note, and if the cancelation is apparent thereon it is discharged. Liability of any party liable on a bill or note may be discharged by the intentional cancelation of his signature by the holder or his agent. The usual mode of canceling a bill is to write the word “paid” or “discharged” across the bill or note. If the cancelation is made unintentionally, or under a mis take or without the authority of the holder, it is in operative, tho the burden of proof is on the person who alleges that the cancelation was made uninten tionally or under a mistake.

9. is the making of a false document, knowing it to be false, with the intention that it shall be used or acted upon as genuine, to the prejudice of any one, whether within Canada or not, or that some person should be induced, by the belief that it is genuine, to do or refrain from doing any thing. Signing the name of a nonexistent or fictitious person or firm with fraudulent intention has been held to be forgery. A forged signature cannot be ratified, tho where a signature is placed on an instrument without authorization, but under circumstances not amounting to a forgery, it may be ratified. Where a signature on a bill is forged, or is placed thereon with out the authority of the person whose signature it purports to be, the forgery or unauthorized signature is wholly inoperative. No right to retain the bill, or

to give a discharge therefor, or to enforce payment thereof against any party thereto can be acquired thru or under that signature, unless the party against whom it is sought to retain payment of the bill is pre cluded from setting up forgery or want of authority.

In order to protect a bank which may pay a check or bill payable to order on demand, where one or more indorsements may be forged or unauthorized, the statute provides that when a check payable to order is paid by the drawee upon a forged indorsement out of the funds of the drawer,. or is paid and charged to his account, the drawer shall have no right of action against the drawee for the recovery of the amount so paid, or any defence to a claim by the drawee for this amount, unless he, the drawer, gives notice of the forgery in writing to the drawee within one year after he has acquired notice thereof. In other words, an indorser whose signature to a check has been forged, and out of whose account the amount of the check has been paid by the bank, must make claim upon the bank at once. If he waits for one year, he has lost any right to bring action, and the check will be considered to have been paid in due course. Where a partner in a commercial firm fraudulently accepts a bill in the firm name for his private debt, the firm cannot set up a fraud against a holder for value with out notice. The partner was presumed to have authority from his copartners to do all acts connected with the partnership business. It has been held, how ever, that where a defendant’s name was signed by his nephew, for whom he was in the habit of indorsing, and where he had acknowledged his liability and asked for time, and only denied his liability after his nephew had absconded, it was held that he could not dispute his liability.

If a bill bearing a forged or unauthorized indorse ment is paid in good faith, and in the ordinary course of business, by or on behalf of the drawee or acceptor, the person by whom or on whose behalf the payment is made can recover the amount paid from the person to whom it was paid, or from any indorser who indorsed subsequently to the forged or unauthorized in dorsement. But notice of the indorsement being forged or unauthorized must be given to each such subsequent indorser, within a reasonable time after the person seeking to recover has acquired notice that the indorsement is forged or unauthorized. [1]

Defenses (Adversary Proceedings)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Adversary Proceedings is provided. Finally, the subject of Proceedings in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Adversary Proceedings)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Adversary Proceedings is provided. Finally, the subject of Practice in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Americans With Disabilities Legislation)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Americans With Disabilities Legislation is provided. Finally, the subject of Protection of Disabled Persons in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Civil Infringement Actions)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Civil Infringement Actions is provided. Finally, the subject of Copyright Protection in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Civil Infringement Actions)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Civil Infringement Actions is provided. Finally, the subject of Trademark Protection in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Clayton Act)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Clayton Act is provided. Finally, the subject of Antitrust, Trade Law in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Enforcement)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Enforcement is provided. Finally, the subject of Negotiable Instruments in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Estate Property)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Estate Property is provided. Finally, the subject of Bankruptcy Law in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Freedom of Information)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Freedom of Information is provided. Finally, the subject of Governmental Information in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Immunity From Liability)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Immunity From Liability is provided. Finally, the subject of Civil Rights Law in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Maritime Liens)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Maritime Liens is provided. Finally, the subject of Admiralty Law in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Pleadings)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Pleadings is provided. Finally, the subject of Civil Procedure in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Price Discrimination)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Price Discrimination is provided. Finally, the subject of Antitrust, Trade Law in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Public Facilities)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Public Facilities is provided. Finally, the subject of Civil Rights Law in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Rehabilitation Legislation)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Rehabilitation Legislation is provided. Finally, the subject of Protection of Disabled Persons in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Robinson-Patman Act)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Robinson-Patman Act is provided. Finally, the subject of Antitrust, Trade Law in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Sherman Act)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Sherman Act is provided. Finally, the subject of Antitrust, Trade Law in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Third Party Rights)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Third Party Rights is provided. Finally, the subject of Secured Transactions in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Tying Arrangements)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Tying Arrangements is provided. Finally, the subject of Price Fixing in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Defenses (Tying Arrangements)

This section introduces, discusses and describes the basics of defenses. Then, cross references and a brief overview about Tying Arrangements is provided. Finally, the subject of Restraints of Trade in relation with defenses is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Resources

Notes

  1. Walter Johnson, “Commercial Law” (New York, 1917)

See Also

Further Reading

In Patent Damages Law

Note: for more information on patent damages law, click here.
This covers:

  • Enhancement of damages good faith defense (including infringer’s defense: opinion of
    counsel)
  • Estoppel (see more in this entry)
  • Laches or Delay
  • Limitations on Damages (see more in this entry)
  • Panduit standard for proving lost profits damages (see below)

Panduit standard for proving lost profits damages includes:

  • Infringer’s name and reputation as defense
  • Market expansion defense: demand for patent product
  • ‘‘Submarket’’ defense: demand for patent product

Defenses and the State Laws

Select from the list of U.S. States below for state-specific information on Defenses:

Defenses: Summary

In this entry, Defenses covers:

  • Justification, Necessity, and Duress
  • Defense of Property or Persons
  • Alibi
  • Entrapment
  • Insanity and Diminished Capacity

Defenses: Main Elements

The coverage of Defenses includes the following main elements:

Justification, Necessity, and Duress

Find out an overview of this topic, in relation to Defenses, in the legal Ecyclopedia.

Defense of Property or Persons

There is information on this basic subject in the legal Ecyclopedia.

Alibi

Find out an overview of this issue following this link (topic).

Entrapment

There is information on this basic subject matter in this legal reference.

Insanity and Diminished Capacity

Find out an overview of this topic in the legal Ecyclopedia.

References

See Also

  • Criminal Law
  • Criminal Procedure
  • Defenses

Defenses: Main Elements

The coverage of Defenses includes the following element(s):

Remedies

Find out an overview of this topic, in relation to Defenses, in the legal Ecyclopedia.

References

See Also

  • Tort
  • Product Liability

Resources

Further Reading

Defenses: Open and Free Legal Research of US Law

Federal Primary Materials

The U.S. federal government system consists of executive, legislative, and judicial branches, each of which creates information that can be the subject of legal research about Defenses. This part provides references, in relation to Defenses, to the legislative process, the federal judiciary, and the primary sources of federal law (cases, statutes, and regulations).

Federal primary materials about Defenses by content types:

Laws and Regulations

US Constitution
Federal Statutory Codes and Legislation

Federal Case Law and Court Materials

U.S. Courts of Appeals
United States courts of appeals, inclouding bankruptcy courts and bankcruptcy appellate panels:

Federal Administrative Materials and Resources

Presidential Materials

Materials that emanate from the President’s lawmaking function include executive orders for officers in departments and agencies and proclamations for announcing ceremonial or commemorative policies. Presidential materials available include:

Executive Materials

Federal Legislative History Materials

Legislative history traces the legislative process of a particular bill (about Defenses and other subjects) for the main purpose of determining the legislators’ intent behind the enactment of a law to explain or clarify ambiguities in the language or the perceived meaning of that law (about Defenses or other topics), or locating the current status of a bill and monitoring its progress.

State Administrative Materials and Resources

State regulations are rules and procedures promulgated by state agencies (which may apply to Defenses and other topics); they are a binding source of law. In addition to promulgating regulations, state administrative boards and agencies often have judicial or quasi-judicial authority and may issue administrative decisions affecting Defenses. Finding these decisions can be challenging. In many cases, researchers about Defenses should check state agency web sites for their regulations, decisions, forms, and other information of interest.

State rules and regulations are found in codes of regulations and administrative codes (official compilation of all rules and regulations, organized by subject matter). Search here:

State opinions of the Attorney General (official written advisory opinions on issues of state law related to Defenses when formerly requested by a designated government officer):

Tools and Forms

Law in Other Regions

*This resource guide is updated frequently. However, if you notice something is wrong or not working, or any resources that should be added, please notify us in any of the "Leave a Comment" area.

Leave a Comment