Code of Alabama

Ala. Code § 7-3-303 (2026)

Value and Consideration.

✓ official Alabama Legislature (ALISON) text, current July 2026

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(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.

(Acts 1965, No. 549, p. 811; repealed by Acts 1995, No. 95-668, p. 1381, §1; added by Acts 1995, No. 95-668, p. 1381, §1.)

Notes of Decisions

Cited in 2 cases, 1993–2004 · leading case: Noble v. Baker, 892 So. 2d 936 (Ala. Civ. App. 2004).

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Noble v. Baker, 892 So. 2d 936 (Ala. Civ. App. 2004). · cites it 5× “Noble argues on appeal that pursuant to § 7-3-303, Ala.Code 1975, a part of Alabama’s version of the Uniform Commercial Code, an instrument issued for value is also issued for consideration and that, therefore, the lack of consideration is not a defense available to Baker and…”

Util. Contractors Fin. Servs., Inc. v. Amsouth Bank N.A. (In re Joe Morgan, Inc.), 985 F.2d 1554 (11th Cir. 1993). “Ala.Code § 7-3-303 (emphasis added). The breadth of this provision was recognized by one commentator who observed that: A holder takes for value when he takes the instrument in payment of any antecedent claim of any person, regardless of the circumstances from which the claim…”

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