Which rule states that if someone issues an instrument to a person who does not exist,then any indorsement in thename of the payee is valid as long as the person who pays the instrument doesnot know of the fraud?
A)The Imposter Rule
B)The Indorsement Rule
C)The Conversion Rule
D)The Fictitious Payee Rule

Question

Quizplus · Accepted Answer

The rule that states that if someone issues an instrument to a person who does not exist, then any indorsement in the name of the payee is valid as long as the person who pays the instrument does not know of the fraud is called the Fictitious Payee Rule. This rule aims to protect innocent parties who are unaware of the fraud from being held responsible for the payment.

Which Rule States That If Someone Issues an Instrument to a Person