EconPapers    
Economics at your fingertips  
 

The Basic Principle of Loss Allocation for Unauthorized Checks

James Rogers
Additional contact information
James Rogers: Boston College Law School

Boston College Law School Faculty Papers from Boston College Law School

Abstract: It is commonly thought that the Uniform Commercial Code adopts a negligence principle as the basis of loss allocation for the check system. This article argues that this common assumption is wrong. Instead, the fundamental principle of the check system and all other payment systems is that the burden of unpreventable losses should rest with the providers of the payment system rather than with the users of the payment system. The article shows that the old English case of Price v. Neal is not, as is commonly thought, an anomaly but is instead entirely consistent with the basic principle of loss allocation for the check system. The article suggests that a correct understanding of the basic principle of loss allocation has significant implications for the enforceability of agreements between customers and banks concerning checking accounts. Specifically, an approach that appears to be emerging in recent cases concerning forged facsimile signatures on checks can be seen to be fundamentally misguided.

Keywords: checks; forgery; facsimile signature (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc, nep-his and nep-law
References: Add references at CitEc
Citations:

Downloads: (external link)
http://lsr.nellco.org/cgi/viewcontent.cgi?article=1011&context=bc/bclsfp (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bep:bclsfp:bc_bclsfp-1011

Access Statistics for this paper

More papers in Boston College Law School Faculty Papers from Boston College Law School
Bibliographic data for series maintained by Christopher F. Baum ().

 
Page updated 2025-03-19
Handle: RePEc:bep:bclsfp:bc_bclsfp-1011