O.C.G.A.

O.C.G.A. § 11-3-303 (2019)

Value and consideration

✓ O.C.G.A. — 2019 edition (Public.Resource.Org Release 73)

Code text and O.C.G.A. statutory annotations on this page reflect the 2019 Official Code of Georgia Annotated (Public.Resource.Org Release 73, 2019-08-21; public domain per Georgia v. Public.Resource.Org, 2020). The Syfert case-law annotations in Notes of Decisions, below, are current.

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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) of this Code section, the instrument is also issued for consideration.

History

Code 1981, § 11-3-303, enacted by Ga. L. 1996, p. 1306, § 3.

Annotations

Law reviews. For article discussing judicial activism

in cases involving claims and defenses under the Uniform Commercial Code, see 17 Ga. L. Rev. 569 (1983).

JUDICIAL DECISIONS Editor’s notes. - In light of the similarity of the statutory provisions, decisions under former Code 1933, § 109A-3305 and former Code Section 11-3-305 are included in the annotations for this Code section. Irrevocable payment to third person. - Payee takes for value by irrevocable payment of consideration to third person at direction of maker. Ashburn Bank v. Childress, 120 Ga. App. 632, 171 S.E.2d 768, 1969 Ga. App. LEXIS 887 (1969) (decided under former Code 1933, § 109A-3- 303).

Lack of consideration not shown. - There was no merit to the claim of a maker of a promissory note that the note failed for lack of consideration. The comaker indicated that it was issued in payment of a debt owed by the co-makers and the maker’s company; thus, it was issued for value as payment of an antecedent claim under O.C.G.A. § 11-3-303, and no new consideration needed to pass between the parties. Smith v. Thigpen, 298 Ga. App. 572, 680 S.E.2d 604, 2009 Ga. App. LEXIS 721 (2009).

RESEARCH REFERENCES Am. Jur. 2d. 11 Am. Jur. 2d, Banks and Financial Institutions, §§ 854, 855. 11 Am. Jur. 2d, Bills and Notes, §§ 141, 207, 268 et seq.,

288, 389 et seq. 15A Am. Jur. 2d, Commercial Code, § 8. C.J.S. 10 C.J.S., Bills and Notes, § 185

U.L.A. Uniform Commercial Code (U.L.A.) § 3303. ALR. Right of purchaser of stolen bonds, 1 A.L.R. 717; 85 A.L.R. 357; 102 A.L.R. 28. Cross notes, bills, or checks as consideration for each other, 7 A.L.R. 1569. Effect of Negotiable Instruments Act on statute invalidating instrument given for gambling consideration, 8 A.L.R. 314; 11 A.L.R. 211; 37 A.L.R. 698; 46 A.L.R. 959. Note or check itself as subject of levy and seizure under attachment or garnishment, 41 A.L.R. 1003. One taking bill or note as a gift or in consideration of love and affection as a holder for value or in due course protected against defenses between prior parties, 48 A.L.R. 237.

Consideration for assumption of obligation as guarantor, surety, endorser, or indemnitor, after execution and delivery of principal contract, as predicable upon an antecedent promise to assume or furnish such obligation, 167 A.L.R. 1174. Maturity of one or more of installments of note payable in installments as affecting status of purchaser as holder in due course, 170 A.L.R. 1029. Crediting proceeds of negotiable paper to depositor’s account, as constituting bank a holder in due course, 59 A.L.R.2d 1173. When is instrument issued or transferred for “value” under UCC § 3-303, 77 A.L.R.5th 429.

Notes of Decisions

Cited in 9 cases (1 in the last 5 years), 1987–2026 · leading case: Smith v. Thigpen, 680 S.E.2d 604 (Ga. Ct. App. 2009).

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Smith v. Thigpen, 680 S.E.2d 604 (Ga. Ct. App. 2009). · cites it 8× “OCGA § 11-3-303 (a) (3). And any instrument given for “value” is also given for consideration.”

Bonem v. Golf Club of Georgia, Inc., 591 S.E.2d 462 (Ga. Ct. App. 2003). · cites it 2× “13 OCGA § 11-3-303 (b). 14 (Citation and punctuation omitted.”

Brown v. McGriff, 567 S.E.2d 374 (Ga. Ct. App. 2002). · cites it 2× “” But the court’s reliance on that Code section, which was replaced in 1996 by OCGA § 11-3-303 (a) (3), 4 was misplaced.”

Fedeli v. UAP/Ga. Ag. Chem., Inc., 514 S.E.2d 684 (Ga. Ct. App. 1999). · cites it 2× “” See OCGA § 11-3-303 (b); Southern Dev. Co. v.”

Bank South, N.A. v. Midstates Grp., Inc., 364 S.E.2d 58 (Ga. Ct. App. 1987). · cites it 2× “) OCGA § 11-3-303 (a). “[A] security interest is not enforceable against.”

Stebbins v. Georgia Power Co., 555 S.E.2d 906 (Ga. Ct. App. 2001). · cites it 2× “OCGA § 11-3-303. (c) In good faith. Under the UCC definition, “ ‘[g]ood faith’ means honesty in fact and the observance of reasonable commercial standards of fair dealing.”

Union Planters Nat'l Bank v. Crook, 484 S.E.2d 327 (Ga. Ct. App. 1997). · cites it 2× “The trial court partially granted that motion on January 31, 1996, to the extent that it concluded Union Bank was a holder in due course, OCGA § 11-3-303 (1), and that it had given value for the checks.”

Hall v. Prosero, Inc., 774 S.E.2d 216 (Ga. Ct. App. 2015). · cites it 2× “13 Compare OCGA § 13-3-46 (“Mere inadequacy of consideration alone will not void a contract”) with OCGA § 11-3-303 (b) (“ ‘Consideration’ means any consideration sufficient to support a simple contract.”

Tyler Berryhill v. Miguel Lopez (Ga. Ct. App. 2026). · cites it 2× “572, 573 ( 680 SE2d 604 ) (2009) (quoting OCGA § 11-3-303(a)(3) and citing Deep South Servs.”

— 11-3-303(a)(3) — 1 case

Tyler Berryhill v. Miguel Lopez (Ga. Ct. App. 2026). “572, 573 ( 680 SE2d 604 ) (2009) (quoting OCGA § 11-3-303(a)(3) and citing Deep South Servs.”

Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.