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Can you summarize IACO 554.3405?
UNIFORM COMMERCIAL CODE > Employers responsibility for fraudulent endorsement by employee.
Short Summary
This section of the Iowa Code, specifically under the Uniform Commercial Code, addresses the responsibility of employers for fraudulent endorsement by their employees. The definition of ’employee’ includes independent contractors and employees of independent contractors retained by the employer. ‘Fraudulent endorsement’ is defined as a forged endorsement purporting to be that of the employer or the person identified as payee. ‘Responsibility’ with respect to instruments includes various authorities related to signing, endorsing, processing, preparing, and controlling instruments on behalf of the employer. If an employer entrusted an employee with responsibility for an instrument and the employee or someone acting with them makes a fraudulent endorsement, the endorsement is effective as if made by the person to whom the instrument is payable. However, if the person paying or taking the instrument fails to exercise ordinary care and that failure contributes to the loss resulting from the fraud, they may be held liable to the extent their lack of care contributed to the loss. The section also clarifies what constitutes an endorsement made in the name of the person to whom the instrument is payable. No specific penalties are mentioned in this section.
Whom does it apply to?
Employers and employees
What does it govern?
Employers responsibility for fraudulent endorsement by employee
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
Iowa