Generally, When an Endorsement on a Check Has Been Forged

question 12

Multiple Choice

Generally, when an endorsement on a check has been forged, which party is the party ultimately liable for the loss?

• A) The drawer.
• B) The first party to accept the forged instrument.
• C) The first endorser of the instrument.
• D) The bank of the first party to accept the forged instrument.
• E) The bank of the drawer even if proper notice was given of the forgery.

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Definitions:

Employees

Individuals who work for another person or organization in return for compensation.

Expressed Agency

An agency created in a written or oral agreement. Also called agency by agreement.

Principal

The main party to a transaction, such as a buyer or seller in a contract, or an individual who empowers another (agent) to act on their behalf.

Contract Authority

A power granted to an individual or entity to enter into legally binding agreements on behalf of another person or entity.