When an instrument has a forged indorsement, the loss usually falls on the first party to take the instrument.

Question

Quizplus · Accepted Answer

When an instrument has a forged endorsement, the loss is generally borne by the first party who took the instrument, as they are responsible for ensuring that all endorsements are genuine before accepting the instrument. Subsequent parties who received the instrument after the forged endorsement may also be liable depending on the circumstances.

When an Instrument Has a Forged Indorsement, the Loss Usually