In the scenario presented for this week regarding Mr. Baracus, the question of liability is to be determined. A checkbook was left behind at a fraternity house by Mr. Baracus which resulted in an unauthorized check being presented to the bank. The check was accepted by the bank and paid from Mr. Baracus’ account. There are liabilities on both parties, although the bank is absolved of liability due to the failure of Mr. Baracus to exercise ordinary care with his checkbook.
Bank Liability
In the scenario involving Mr. Baracus, the bank accepted and paid on a forged check. Given that the check was presented to the …show more content…
Baracus situation, the bank initially received the primary liability. The check presented to the bank was not signed by Mr. Baracus and was therefore no properly payable. However, in Section 3-406 of the UCC, liability can be shifted to the customer if ordinary care is not recognized (Legal Information Institute, 2012). In the case of Mr. Baracus, the fact that he left his checkbook at the fraternity house for someone to steal could be seen as negligence that significantly contributed to the forgery. The customer, by leaving his checkbook in a public location, did not do his due diligence in keeping his financial information and documents