Tafel Racing Team, Inc. (Tafel Racing), and Lion Antique Investments & Consulting Services, Inc. (Lion), entered into an agreement to purchase two Ferrari race cars. Pursuant to the agreement, Lion agreed to loan the race cars to Tafel Racing for use in the 2008 American Le Mans Series. Tafel Racing was obligated to purchase or sell the race cars 90 days after the conclusion of the 2008 American Le Mans Series. The plaintiff, James Tafel Jr. (Tafel), is the former CEO of Tafel Racing. East Coast Jewelry (East Coast) agreed to purchase one of the Ferrari race cars for $700,000. Vladislav Yampolsky is a partial owner of East Coast. Although East Coast paid Tafel Racing $700,000, Tafel Racing did not deliver the car or refund East Coast’s money. Tafel Racing filed a Voluntary Petition for Bankruptcy and listed Yampolsky as one of Tafel Racing’s creditors holding unsecured nonpriority claims in the amount of $600,000. Tafel Racing also identified Tafel as a codebtor for each of Tafel Racing’s creditors. At Yampolsky’s request, Tafel executed a nonnegotiable promissory note in the principal amount of $600,000, plus $22,454.14 in interest, payable to Yampolsky. Tafel also executed a Deed to Secure Debt granting Yampolsky a security interest in Tafel’s residence in Georgia. The note stated that it was “executed and delivered . . . in consideration of advances by Yampolsky to Tafel.” Tafel, however, made no payments on the note. Yampolsky assigned his rights and interest in
the note to Lion. Tafel claimed that the note was invalid and unenforceable.

CASE QUESTIONS

1. What defense can Tafel assert that would make the note unenforceable?

2. What must the note contain to make the note enforceable? Give an example.