Forgeries and Double Forgeries Under Articles 3 and 4 of the UCC

Abstract

Remedies available to a person or bank which has taken on a forged instrument, as well as to a drawee bank which has paid that instrument, are dependent to a large extent upon the status of the party receiving the instrument in the first instance. The technical classifications of those in possession of commercial paper, and particularly the definition of a "holder in due course," must be derived from various Sections of the Uniform Commercial Code, the interdependence of which may not be readily apparent. This article will attempt to reconcile these apparently inconsistent Sections of the Code, as they relate to double forgeries, in terms of the broad policy considerations underlying the negotiability of instruments and the allocation of loss among parties to an action involving such instruments.