Asked by David Tovar on May 02, 2024
Verified
If the issuer and the person paying an instrument subject to the impostor rule are both negligent, comparative negligence would apply.
Comparative Negligence
A legal doctrine that reduces the amount of damages that a plaintiff can recover in a negligence-based claim, based upon the degree to which the plaintiff's own negligence contributed to the cause of their injuries.
Impostor Rule
A legal principle that specifies when a party may be held liable for fraud or deceit if they knowingly allow another to impersonate them for gain.
- Understand the effects of fraud, forgery, and duress on the negotiation and enforceability of negotiable instruments.
Verified Answer
AC
Alicia CliftonMay 04, 2024
Final Answer :
True
Explanation :
Under the impostor rule, if both the issuer and the person paying an instrument are negligent, comparative negligence principles can be applied to determine the extent of each party's liability. This means the court will assess the relative negligence of each party to decide how the loss from the fraudulent transaction should be allocated between them.
Learning Objectives
- Understand the effects of fraud, forgery, and duress on the negotiation and enforceability of negotiable instruments.