Consideration (Sections 24-29) Flashcards
What is a valuable consideration?
Value is any consideration sufficient to support a simple contract. An antecedent or pre-existing debt constitutes value, and is deemed such whether the instrument is payable on demand or at a future time.
What is a holder for value?
Where value has at any time been given for the instrument, the holder is deemed a holder for value in respect to all parties who become such prior to that time.
What is the rule if a person has a lien over the instrument?
Where the holder has a lien on the instrument arising either from contract or by implication of law, he is deemed a holder for value to the extent of his lien.
What is the rule if there is an absence of consideration? How about partial absence of consideration?
Absence or failure is a matter of defense against any person not a holder in due course, and partial failure of consideration is a defense pro tanto, whether the failure is an ascertained and liquidated amount otherwise.
What is an accommodated party?
An accommodated party is one who has signed the instrument as a maker, drawer, acceptor or indorser, without receiving value therefor, and for the purpose of lending his name to some other person. Such person is liable on the instrument to a holder for value, notwithstanding such holder, at the time of the taking of the instrument, knew him to be only an accommodated party.
