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

Quizplus · Accepted Answer

The impostor rule allows negotiation of an instrument without a valid indorsement if an impostor induces the drawer to issue the instrument to them, treating the indorsement as valid.

The Impostor Rule Is an Exception to the General Rule