Except as otherwise provided in Chapter 55, Articles 3, 4 and 5, a person gives value for rights if the person acquires them:

(1) in return for a binding commitment to extend credit or for the extension of immediately available credit, whether or not drawn upon and whether or not a charge-back is provided for in the event of difficulties in collection;

(2) as security for, or in total or partial satisfaction of, a preexisting claim;

(3) by accepting delivery under a preexisting contract for purchase; or

(4) in return for any consideration sufficient to support a simple contract.

History: Laws 2005, ch. 144, § 12.

OFFICIAL COMMENTS

UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.

Source. — Former Section 1-201(44) [55-1-201(44) NMSA 1978].

Changes from former law. — Unchanged from former Section 1-201 [55-1-201 NMSA 1978], which was derived from Sections 25, 26, 27, 191, Uniform Negotiable Instruments Law; Section 76, Uniform Sales Act; Section 53, Uniform Bills of Lading Act; Section 58, Uniform Warehouse Receipts Act; Section 22(1), Uniform Stock Transfer Act; Section 1, Uniform Trust Receipts Act. These provisions are substantive rather than purely definitional. Accordingly, they have been relocated from former Section 1-201 to this section.

All the Uniform Acts in the commercial law field (except the Uniform Conditional Sales Act) have carried definitions of "value." All those definitions provided that value was any consideration sufficient to support a simple contract, including the taking of property in satisfaction of or as security for a pre-existing claim. Subsections (1), (2), and (4) in substance continue the definitions of "value" in the earlier acts. Subsection (3) makes explicit that "value" is also given in a third situation: where a buyer by taking delivery under a pre-existing contract converts a contingent into a fixed obligation.

This definition is not applicable to Articles 3 and 4, but the express inclusion of immediately available credit as value follows the separate definitions in those Articles. See Sections 4-208, 4-209, 3-303 [55-4-208, 55-4-209, 55-3-303 NMSA 1978, respectively]. A bank or other financing agency which in good faith makes advances against property held as collateral becomes a bona fide purchaser of that property even though provision may be made for charge-back in case of trouble. Checking credit is "immediately available" within the meaning of this section if the bank would be subject to an action for slander of credit in case checks drawn against the credit were dishonored, and when a charge-back is not discretionary with the bank, but may only be made when difficulties in collection arise in connection with the specific transaction involved.

Definitional cross reference. — "Agreement". Section 1-201.

Repeals and reenactments. — Laws 2005, ch. 144, § 12, effective January 1, 2006, repealed former 55-1-204 NMSA 1978 as enacted by Laws 1961, ch. 96, § 1-204, and enacted a new 55-1-204 NMSA 1978.

Laws 2005, ch. 144, § 12, effective January 1, 2006, repealed former 55-1-204 NMSA 1978 relating to "reasonable time" and "seasonably", as enacted by Laws 1961, ch. 96, § 1-204, and enacted a new 55-1-204 NMSA 1978 relating to value. The substance of former 55-1-204 NMSA 1978 has been enacted as a new 55-1-205 NMSA 1978 by Laws 2005, ch. 144, § 13. For provisions of former 55-1-204 NMSA 1978, see the 2004 NMSA 1978 on NMOneSource.com.

Compiler's notes. — For former law governing "value", see Subsection 44 of 55-1-201 NMSA 1978 on the 2004 NMSA 1978 on NMOneSource.com.

For current law governing reasonable time and seasonableness, see 55-1-205 NMSA 1978.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 11 Am. Jur. 2d Bills and Notes § 888.

86 C.J.S. Time § 8.