Commercial Code section 1204

Except as otherwise provided in Divisions 3, 4, 5, 6, and 12, 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 chargeback 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.

Source: Section 1204, https://leginfo.­legislature.­ca.­gov/faces/codes_displaySection.­xhtml?lawCode=COM§ionNum=1204.­ (accessed Jun. 2, 2025).

Last Updated

May 12, 2025

§ 1204’s source at ca​.gov