Sec. 42a-3-303. Value and consideration. - Connecticut Statutes

      Sec. 42a-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.

      (1959, P.A. 133, S. 3-303; P.A. 91-304, S. 29.)

      History: P.A. 91-304 substantially revised provisions re when an instrument is issued or transferred for value and added Subsec. (b) re consideration.

      Annotations to former statutes:

      (1958 Rev., S. 39-26): Compromise of lawsuit is valid consideration. 70 C. 634; 76 C. 126. So is antecedent debt, whether note taken in payment of or as security for it. 72 C. 581; 94 C. 607. Services incident to organization of a corporation will sustain note of corporation. 73 C. 626. Forbearance on request of wife to sue husband good consideration for her note. 75 C. 91; 93 C. 359. Sale made in another state, which is valid there but would not be here, is good consideration. 80 C. 509. Transfer of note of third person in payment for stock, under agreement that seller shall collect it and remit any balance, is a good consideration. 82 C. 585. Discharge of unliquidated liability good consideration. Id., 600. But surrender of forged note is not a good consideration. 89 C. 592. Cited. 118 C. 118.

      (1958 Rev., S. 39-27): Bona fide holder for value without notice and in due course may enforce note against maker without regard to defects of title of prior parties. 118 C. 117.

      (1958 Rev., S. 39-28): Endorsement of note of third party as collateral security gives endorsee a lien on the note. 77 C. 634.

      Annotations to present section:

      Cited. 242 C. 17.

      Subdiv. (b):

      Bank which provisionally credits deposit against overdrawn account gives "value"; deposit as "value" discussed. 33 CS 641.

      Former Subdiv. (c):

      Cited. 187 C. 637.