impostor rule
impostor rule. Commercial law. The principle that an impostor’s indorsement of a negotiable instrument is not a forgery, and that the drawer or maker who issues the instrument to the imposter is negligent and therefore liable to the holder for payment. • If a drawer or maker issues an instrument to an impostor, any resulting forgery of the payee’s name will be effective in favor of a person paying on the instrument in good faith or taking it for value or collection. UCC § 3-404. [Cases: Banks and Banking 147; Bills and Notes 201, 279. C.J.S. Banks and Banking §§ 415–416; Bills and Notes; Letters of Credit §§ 29, 150–151.]
