Commercial Law - Supreme Court Review
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Authors
Issue Date
1980
Volume
13
Issue
Type
Journal Article
Language
Keywords
Alternative Title
Abstract
FIRST PARAGRAPH(S)|As a general rule, forged indorsements are ineffective authority for payment of a check by a drawee or other payor. Sections 3-405 and 3-406 of the Uniform Commercial Code carve out two exceptions to this rule. Each provision recognizes certain situations in which the drawer's own behavior demands that the forged indorsement be treated as effective against him. Under the provisions of U.C.C. 3-405(c) an employer is es-topped from denying the effectiveness of an endorsement made by an employee when "an ... employee ... has supplied him with the name of the payee intending the latter to have no such interest." In short, this frees the drawer from the burden of the loss, imposing it upon an employer who, the draftsmen felt, should bear the risk of employee financial misconduct...
Description
Citation
13 Creighton L. Rev. 144 (1979-1980)
Publisher
Creighton University School of Law