Accounting In a situation where Consumer purchases defective merchandise but the seller has sucessfully negotiated Consumer's check to a third party company who qualifies as a Holder in Due Course, the rules of Article 3 would require Consumer to pay the third party on the check even though the goods were defective UNLESS * Consumer's home state had passed a change in the law to protect Consumer from this happening * the item was bought on credit and had the Federal Trade Commission Notice protecting Consumer from this * either or both of the above was present * the rule of substantial performance of the contract applies