Promissory notes and contracts are similar in how they are interpreted and how they are to be enforced in court. To prevail on a claim for breach of a promissory note, a plaintiff needs to show (1) that there is a valid promissory note signed by the maker of the note, (2) that there is a balance due on the note, and that (3) there was a demand for payment made on the maker that has been refused/ignored, leaving the maker in default. Curnutt v. Scott Melvin Transp., Inc., 903 S.W.2d 184, 190 (Mo. Ct. App. 1995).
As to element (1), promissory notes (and contracts) both require consideration. Consideration is typically anything of value promised to another when making a contract/promissory note. One defense to a breach of contract or breach of promissory note suit, then, is that the contract/note did not have consideration. Legally, there is a distinction between a defense of lack of consideration versus failure of consideration. Failure of consideration is applicable when consideration, once existing and legally sufficient, has become worthless or ceased to exist. Ryan v. Tinker, 744 S.W.2d 502, 505 (Mo. Ct. App. 1988). Lack of consideration, on the other hand, is when there was never any consideration sufficient to support the contract/note. Both defenses are affirmative defenses — which, procedurally, must be pled in the answer to the lawsuit or it is waived. Diversified Metal Fabricators, Inc. v. Blue Skies, Inc., 899 S.W.2d 556, 561-62 (Mo. Ct. App. 1995).
Whether you are pursuing a contract/note claim or defending one, it is important to understand all of the strengths and weaknesses of the potential claim. Contact with questions relating to contract and promissory notes.