In Situations Where the Bank Fails to Detect Forged Signatures

question 61

True/False

In situations where the bank fails to detect forged signatures and the customer does not immediately notice that the forged cheques have been cashed from its account,the courts will look to the bank-customer agreement to determine liability.If there is none,the common law rules apply.

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Definitions:

Statutory Assignment

The transfer of legal rights from one party to another under the terms of a statute or law.

Windfall

An unexpected gain or advantage, often in the form of money or goods, that is not anticipated or earned through work.

Separate Contractual Obligation

An independent commitment within a contract, not reliant on the performance or fulfillment of other obligations within the same agreement.

Contractual Relationship

A legally binding agreement between two or more parties, creating mutual obligations enforceable by law.