The risk of the forgery of signatures and the problem of the conflicting entitlements in the law of negotiable instruments: a comparative study

Abstract

The concern of this thesis is to examine the risk of forgery of signatures In the context of negotiable Instruments. The allocation of the said risk is submitted to represent one of the most controversial matters among the existing legal systems. It is believed that the issue under consideration has represented a major obstacle to the adoption of an acceptable unification of the law of negotiable instruments. The main task of this thesis is to propose an efficient allocation of the risk of the forgery of signatures. The scope of this enquiry is confined to the forgery of two forms of signatures, namely, that of the proprietor of a blank document and that of the payee or indorsee of a negotiable instrument. The forgery of such signatures is submitted to represent the major incident of the problem of risk allocation in the context of negotiable Instruments. Its involvement affects the currency of such documents and ultimately, it affects the determination of the property right of negotiable instruments, as well as the enforcement of the incorporated contractual promises and undertakings. In formulating the proposed allocation of the risk of the forgery of signatures, this thesis takes into account economic considerations, as well as the considerations relevant to the institution of negotiable Instrument So The theory underlying such an attitude is firstly, to reconcile with recent developments in the law, secondly to accommodate the needs of modern society and thirdly, to promote the efficiency of a significant finance instrument. The promotion of the efficiency of negotiable instruments would necessarily promote the efficiency of the market. Finally, this thesis examines the attitude of the major existing legal systems in allocating the forgery of signatures in the context of negotiable instruments. In particular, it examines the attitude of the Anglo-American and the Continental Geneva legal systems. It examines the theories underlying such an attitude. It examines the validity of the advanced theories. It examines the compatibility of the attitude of the said legal systems with the considerations underlying the institution of negotiable Instruments as well as those underlying economic reality. Ultimately, this thesis determines the most compatible legal system with the proposed risk allocation rule.