On October 1, 2026, the First Department issued a decision in Hakim v. Hakim, 2026 NY Slip Op. 05598, holding that a note based on past consideration failed to meet the requirements for validity, explaining:
Kamran made a prima facie case for recovery under the promissory note signedby Said by submitting the note, wherein Said promised to pay him $525,000 on June 9, 2003, plus interest at 12% per annum, and testifying that Said never satisfied his obligation on the note. Kamran was not required to demonstrate that there was adequate consideration for the note. Rather, it was Said’s burden to demonstrate a lack of consideration.
Said met his burden of establishing inadequate consideration for the note because, according to Kamran’s own affirmation, the note was for past consideration. The general rule is that past consideration is no consideration. The burden thus shifted back to Kamran to demonstrate an exception to the general rule, which he failed to do.
There are two exceptions to the general rule. First, the note may be enforceable where itexpressly recites the nature of the past consideration in writing. The writing must be explicit and not vague or imprecise. Here, the note provides no details about consideration, stating merely that the promise is for value received, which is insufficient.
Second, under Uniform Commercial Code § 3-408, no consideration is necessary for an instrument given in payment of an antecedent obligation of any kind. Kamran argues that this exception applies because Said agreed to sign the note to repay Kamran for Kamran’s 1970’s deposit of $600,000 for a letter of credit; thus, it was for value received as provided in the note. Although Said admitted that his signature appeared on the note, he said it pertained to a proposed real estate transaction that never came to fruition. The trial court did not credit Kamran’s testimony regarding the purpose of the note. Thus, even if Kamran’s allegations would provide a basis to enforce the note under UCC 3-408, the court’s credibility determination is entitled to deference.
(Internal quotations and citations omitted).