41-03-39. (3-402) Signature by representative.
785 words·~4 min read·
/nd/title-41/chapter-41-03-negotiable-instruments/41-03-39·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
1. If a person acting, or purporting to act, as a representative signs an instrument by
signing either the name of the represented person or the name of the signer, the
represented person is bound by the signature to the same extent the represented
person would be bound if the signature were of a simple contract. If the represented
person is bound, the signature of the representative is the "authorized signature of the
represented person" and the represented person is liable on the instrument, whether
or not identified in the instrument. 2. If a representative signs the name of the representative to an instrument and that
signature is an authorized signature of the represented person, the following rules
apply:
a. If the form of the signature shows unambiguously that the signature is made on
behalf of the represented person who is identified in the instrument, the
representative is not liable on the instrument.
b. Subject to subsection 3, if the form of the signature does not show
unambiguously that the signature is made in a representative capacity or if the
represented person is not identified in the instrument, the representative is liable
on the instrument to a holder in due course that took the instrument without notice
that the representative was not intended to be liable on the instrument. With
respect to any other person, the representative is liable on the instrument unless
the representative proves that the original parties did not intend the
representative to be liable on the instrument. 3. If a representative signs the name of the representative as drawer of a check without
indication of the representative status and the check is payable from an account of the
represented person who is identified on the check, the signer is not liable on the check
if the signature is an authorized signature of the represented person.
41-03-40. (3-403) Unauthorized signature. 1. Unless otherwise provided in this chapter or chapter 41-04, an unauthorized signature
is ineffective except as the signature of the unauthorized signer in favor of a person
who in good faith pays the instrument or takes it for value. An unauthorized signature
may be ratified for all purposes of this chapter. 2. If the signature of more than one person is required to constitute the authorized
signature of an organization, the signature of the organization is unauthorized if one of
the required signatures is missing. 3. The civil or criminal liability of a person who makes an unauthorized signature is not
affected by any provision of this chapter that makes the unauthorized signature
effective for the purposes of this chapter.
41-03-41. (3-404) Impostors - Fictitious payees. 1. If an impostor, by use of the mails or otherwise, induces the issuer of an instrument to
issue the instrument to the impostor or to a person acting in concert with the impostor,
by impersonating the payee of the instrument or a person authorized to act for the
payee, an endorsement of the instrument by any person in the name of the payee is
effective as the endorsement of the payee in favor or any person that in good faith
pays the instrument or takes it for value or for collection. 2. If a person whose intent determines to whom an instrument is payable under
subsection 1 or 2 of section 41-03-10 does not intend the person identified as payee to
have any interest in the instrument or if the person identified as payee of an instrument
is a fictitious person, the following rules apply until the instrument is negotiated by
special endorsement:
a. Any person in possession of the instrument is its holder.
b. An endorsement by any person in the name of the payee stated in the instrument
is effective as the endorsement of the payee in favor of any person that in good
faith pays the instrument or takes it for value or for collection. 3. Under subsection 1 or 2, an endorsement is made in the name of a payee if it is made
in a name substantially similar to that of the payee or if the instrument, whether or not
endorsed, or deposited in a depositary bank to an account in a name substantially
similar to that of the payee.
4. With respect to an instrument to which subsection 1 or 2 applies, if a person paying
the instrument or taking it for value or for collection fails to exercise ordinary care in
paying or taking the instrument and that failure substantially contributes to loss
resulting from payment of the instrument, the person bearing the loss may recover
from the person failing to exercise ordinary care to the extent the failure to exercise
ordinary care contributed to the loss.