The impostor rule is an exception to the general rule that negotiation of any order instrument requires a valid indorsement by the person to whose order the instrument is payable.

Question

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The impostor rule allows for the enforcement of an instrument in favor of a person who, under a false identity, induces the maker or drawer of the instrument to issue it to them. This is an exception to the requirement of a valid indorsement by the named payee, as it treats the impostor as if they were the rightful payee for purposes of negotiation.

The Impostor Rule Is an Exception to the General Rule