Unauthorized Signature (Banking) Law & Legal Definition


Signature is the personal name written in one's hand. The intention of putting signature is to accept, authenticate, or execute a document. Sometimes a mark, seal, stamp or symbol constitutes signature. The drawer of a check can sue a drawee bank if it paid a check that was not properly payable. This includes unauthorized signature. Unauthorized signature includes forged signatures.

Pursuant to U.C.C. § 3-403, an unauthorized signature is ineffective except as the signature of the unauthorized signer in favor of a person who in good faith pays the instrument or takes it for value. However, an unauthorized signature can be ratified. When the signature of more than one person is required to constitute the authorized signature of an organization, the signature of the organization is unauthorized if one of the required signatures is lacking.