• The ten real defenses are (1) fraud in the factum, (2) forgery of a necessary signature, (3) adjudicated insanity that, under state law, renders the contract void from its inception, (4) material alteration of the instrument, (5) infancy, which renders the contract voidable under state law, (6) illegality that renders the underlying contract void, (7) duress, (8) discharge in bankruptcy, or any discharge known to the holder in due course, (9) a suretyship defense (for example, if the holder knew that one indorser was signing as a surety or accommodation party), and (10) a statute of limitations (generally three years after dishonor or acceptance on a draft and six years after demand or other due date on a note).
— Also termed absolute defense; universal defense. [Cases: Bills and Notes 364. C.J.S. Bills and Notes; Letters of Credit § 191.]
