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84-1-204. Value. Except as otherwise provided in articles 3 and 4 of chapter 84 of the Kansas Statutes Annotated, and amendments thereto, a person gives value for rights if the person acquires them:

(1) In return for a binding commitment to extend credit or for the extension of immediately available credit, whether or not drawn upon and whether or not a charge-back is provided for in the event of difficulties in collection;

(2) as security for, or in total or partial satisfaction of, a preexisting claim;

(3) by accepting delivery under a preexisting contract for purchase; or

(4) in return for any consideration sufficient to support a simple contract.

History: L. 2007, ch. 89, § 12; July 1, 2008.

KANSAS COMMENT, 1996

1. The term "reasonable time" appears in literally dozens of Code sections. This section establishes broad criteria for determining a reasonable time in particular cases.

2. Under subsection (1), the parties may determine for themselves what constitutes a "reasonable time" in their particular transaction. However, a clause fixing a reasonable time may not be "manifestly unreasonable." Although what makes a clause "manifestly unreasonable" is not defined in the Code, Official Comment 1 explains that the purpose of the limitation is to permit courts to disregard a clause that "whether by inadvertence or overreaching fixes a time so unreasonable that it amounts to eliminating all remedy under the contract." See, e.g., Koch Supplies, Inc. v. Farm Fresh Meats, Inc., 630 F.2d 282 (5 th Cir. 1980) (provision giving 48 hours after receipt to reject nonconforming smokehouse manifestly unreasonable as to latent defects when smokehouse would take several weeks to set up). Presumably, the inquiry is similar to that made in evaluating good faith under 84-1-203 and unconscionability under 84 -2-302 and 84-2a-108.

3. Subsection (2) states that a reasonable time depends on the circumstances of the transaction. See Wendling v. Puls, 227 K. 780, 610 P.2d 580 (1980). For application of the phrase "reasonable time" in the context of individual sections of the Code, see, e.g., Newmaster v. Southeast Equip., Inc., 231 K. 466, 646 P.2d 488 (1982) (three days after tender accepted is reasonable time for giving notice of nonconformity); Wendling v. Puls, supra (permitting seller to set time for delivery); La Villa Fair v. Lewis Carpet Mills, Inc., 219 K. 395, 548 P.2d 825 (1976) (stating that what constitutes reasonable time is for trier of fact if facts are disputed, but if facts are undisputed the question becomes one for the court).

4. Subsection (3) defines the term "seasonably," which appears in many sections of the Code, basically as synonymous with "reasonable time" under subsection (1).

Revisor's Note:

Former section 84-1-204 was repealed by L. 2007, ch. 89, § 49 and the number reassigned to the current text.

Law Review and Bar Journal References:

Paragraph (1) cited in "Secured Transactions in Kansas: The New Look," J. Eugene Balloun, 5 W.L.J. 192, 193 (1966).

"The Buyer's Right to Return Unsatisfactory Goods—The Uniform Commercial Code Remedies of Rejection and Revocation of Acceptance," George I. Wallach, 20 W.L.J. 20, 29 (1980).

CASE ANNOTATIONS

1. Reasonable time for taking action depends on nature, purpose and circumstances of such action. Wendling v. Puls, 227 Kan. 780, 784, 610 P.2d 580.

2. Provisions in contract limiting time for filing suit as provided in K.S.A. 84-2-725 examined. Vanier v. Ponsoldt, 251 Kan. 88, 108, 833 P.2d 949 (1992).


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