(1) Negotiation is effective even if obtained:
- (a) from an infant, a corporation exceeding its powers, or a person without capacity; or
- (b) by fraud, duress, or mistake or in breach of duty or as part of an illegal transaction.
- (2) To the extent permitted by law, negotiation may be rescinded or may be subject to other remedies, but those remedies may not be asserted against a subsequent holder in due course or a person paying the instrument in good faith and without knowledge of facts that are a basis for rescission or other remedy.
History: En. Sec. 108, Ch. 410, L. 1991.