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Discuss the liability of parties when the signature has been forged

Discuss the liability of parties when the signature has been forged

Answers

Masinde
Any forged signature on a negotiable instrument aimed at illegitimately to make that instrument payable is is a scandalous.
The invariable Commercial Code never focuses on prosecution of criminal offenders, instead focuses on protecting parties involved in such an unlawful signature on a negotiable instrument. As such, the fixed Commercial Code provides for unauthorized signatures to be ratified, if they are on a negotiable instrument which a third party either bought or paid for in good faith without any knowledge of that forgery.
In this case, the third party would be a holder in due course and would thus be protected from any defense against paying the negotiable instrument. Consequently, the bank which cashes a check with a forged signature, could still use the check to add to its own funds regardless of any defense mounted by the victim of the forgery.
In other cases, unauthorized signature is considered ineffectual, however, if such a forgery is discovered, it would nullify transactions made with that negotiable instrument. Moreover, regardless of the ratification of a negotiable instrument bearing a forged signature, the party commiting the forgery will not be held free from the criminal or civil liability incurred by its actions.
Mr Masinde answered the question on May 5, 2018 at 06:46

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