Contract Law
Under the UCC (Uniform Commercial Code) section 3-405 (Employer's Responsibility for Fraudulent Endorsement by Employee) corporate accounts are exposed to a multitude of fraudulent and forgery risks and therefore it has been mandated that the corporate employer as well as the bank are responsible for keeping a check on their account activities. In the above case, Stewart's client may have issued the check on behalf of the corporate employer but the company itself has given no authorization. To properly cash the check Stewart has to first acquire an authorization from the company and endorse it by the signatory or account department of the company. It is only then will Stewart be entitled to the amount owed to him. In a court of law, Stewart cannot sue the bank as the UCC Section 3-405 protects the company from liability to fraudulent individual through these measures (Getty Petroleum Corp. v. American Express Travel Related Servs. Co., as: 90 N.Y.2d 322, June 12, 1997).
The section also protects the bank from liability in the case it encounters endorsement such as those made by Stewart's client. Although Stewart's client might have been genuine in his/her endorsement but the bank has the right to adopt the security measures. The UCC basically focuses on the responsibility of the employee rather than the endorsement itself. The bank furthermore has the right to question Stewart's motive in trying to cash the check and attempt to match that with the corporate employer's business. Once, this information has been satisfactorily proven then, it would be able to allow Stewart to withdraw the cash.
Reference
John Burnett, Forged Endorsement & Section 3-405, BankersOnline.com, February 9, 2004.
Getty Petroleum Corp. v. American Express Travel Related Servs. Co., as: 90 N.Y.2d 322, (June 12, 1997).
Services rendered were necessary for saving life
Emergencies
No other remedy available
Direct relationship between P. And D
Fundamental public policy (encourage doctor to render aid)
In the Copeland case there was not such (Jerod Tufte's Contract Law 1999).
References
Contracts I - Professor Rose 1999 at…
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