IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

The Basic Principle of Loss Allocation for Unauthorized Checks

Listed author(s):
  • James Rogers

    (Boston College Law School)

Registered author(s):

    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.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by Boston College Law School in its series Boston College Law School Faculty Papers with number bc_bclsfp-1011.

    in new window

    Date of creation:
    Handle: RePEc:bep:bclsfp:bc_bclsfp-1011
    Contact details of provider: Web page:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:bep:bclsfp:bc_bclsfp-1011. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.