Also known as: unauthorized signature · unauthorised signature · unauthorised signatures · forged signature · unauthorized indorsement
Written by attorneys · grounded in primary & secondary sources — see below
A signature made without actual, implied, or apparent authority. The term includes a forgery.
Usha Upton left her checkbook unlocked in a shared office drawer. A coworker forged her signature on several checks and cashed them at the bank. Because Usha failed to exercise ordinary care, she is precluded from asserting the forgery against the bank that paid in good faith.
Uri Underwood, executor of an estate, failed to monitor account statements for months. A bank employee forged signatures on withdrawal slips and transferred funds. The estate cannot recover from the bank because its own lack of ordinary care substantially contributed to the loss.
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An unauthorized signature is one made without actual, implied, or apparent authority. The definition expressly includes a forgery.
A person whose failure to exercise ordinary care substantially contributes to the making of a forged signature is precluded from asserting the forgery against a good-faith payor or taker for value.
The person asserting preclusion bears the burden of proving the drawer's failure to exercise ordinary care. The person precluded bears the burden on comparative negligence allocation.
No provision in Article 3 that makes the signature effective for commercial purposes changes the civil or criminal liability of the person who made the unauthorized signature.