Printable Format84-3-303. Value and consideration. (a) An instrument is issued or transferred for value if:
(1) The instrument is issued or transferred for a promise of performance, to the extent the promise has been performed;
(2) the transferee acquires a security interest or other lien in the instrument other than a lien obtained by judicial proceeding;
(3) the instrument is issued or transferred as payment of, or as security for, an antecedent claim against any person, whether or not the claim is due;
(4) the instrument is issued or transferred in exchange for a negotiable instrument; or
(5) the instrument is issued or transferred in exchange for the incurring of an irrevocable obligation to a third party by the person taking the instrument.
(b) "Consideration" means any consideration sufficient to support a simple contract. The drawer or maker of an instrument has a defense if the instrument is issued without consideration. If an instrument is issued for a promise of performance, the issuer has a defense to the extent performance of the promise is due and the promise has not been performed. If an instrument is issued for value as stated in subsection (a), the instrument is also issued for consideration.
History: L. 1991, ch. 296, § 29; February 1, 1992.
KANSAS COMMENT, 1996
This section is identical to the 1995 Official Text. It is derived from the former 84-3-303, and its substantive provisions are substantially the same. Historical case and statutory references may be obtained from the 1965 or 1983 bound Volume 7 of the Kansas Statutes Annotated.
Several points should be underscored about the value requirement for holder in due course purposes. The term "value" includes taking an instrument for antecedent debt (paragraph (3)), but does not include a lien or rights by legal process (paragraph (2) and 84-3-302(c)). Value does not include an executory promise to give value unless it is an irrevocable obligation to a third party, which is the common theme of paragraphs (4) and (5). Thus a holder who otherwise qualifies as a holder in due course but who has not fully performed the agreed upon value at the time of receiving notice will only be a partial holder in due course, able to enforce the instrument as discussed in 84-3-302(d) and (e). The holder who receives notice should suspend any further performance.
Revisor's Note:
Former section 84-3-303 was repealed by L. 1991, ch. 296, § 111 and the number reassigned to the current text.