Revised Article 3 provides that the impostor rule does not include an impostor who impersonates an agent of a principal and who induces someone to create a negotiable instrument payable to the principal.

Question

Quizplus · Accepted Answer

Revised Article 3 of the Uniform Commercial Code (UCC) actually states that the impostor rule applies when an impostor induces someone to issue a negotiable instrument by impersonating the payee. The rule allows the person who was tricked into making the instrument to assert that the endorsement by the impostor (or anyone who obtained the instrument from the impostor) is effective as the endorsement of the person to whom the instrument was made payable, thus making the instrument payable to the impostor or subsequent holders in due course.

Revised Article 3 Provides That the Impostor Rule Does Not