Susan purchases goods by telephone from Parker. Susan has never met Parker. Brenton goes to Susan and pretends to be Parker. Susan draws a check payable to the order of Parker and gives the check to Brenton, believing him to be Parker. Brenton forges Parker's indorsement and indorses the check to his brother, William, with the term "without recourse." William then cashes the check at a liquor store. Under the imposter rule, who is liable on the check?

Question

Quizplus · Accepted Answer

According to the imposter rule, Susan would be liable on the check since she was the one who gave the check to Brenton, believing him to be Parker. The fact that Brenton later forged Parker's indorsement and that William cashed the check without recourse does not relieve Susan of her liability on the check. The liquor store would not be liable since they cashed the check in good faith and were not aware of any fraud. Brenton and William may also be liable for their respective roles in the forgery and cashing of the check.

Susan Purchases Goods by Telephone from Parker