| Value (law) |
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At Common Law , certain transferrable obligations were only enforceable if the transferee had acquired them ''for value''. Under the rules of Equity , the rights of a bona fide purchaser for value would not be interfered with. State Court s of various jurisdictions in the US adopted varying definitions of what constituted "value". Under the Uniform Commercial Code , except with respect to Article 3, a person gives value for rights if he acquires them in exchange for: # a binding commitment to extend credit or for the extension of immediately available credit; # as security for or in total or partial satisfaction of a preexisting claim; # accepting delivery pursuant to a preexisting contract for purchase; # generally, any consideration sufficient to support a simple contract. Under Article 3 of the Code, a Negotiable Instrument is transferred for value if the transferee receives in exchange: # a promise of performance, to the extent the promise has been performed; # a security interest or other lien in the instrument other than a lien obtained by judicial proceeding; # the total or partial discharge of an antecedent claim against any person, whether the claim is due; # another negotiable instrument; or # an irrevocable obligation to a third party by the person taking the instrument. The setting forth in express terms of what is "value" in the context of commercial transactions was a bold step forward by the drafters of the UCC, since the jurisdictional distinctions as to value made certain transactions valid in one state and invalid in another. |
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