Legal Definitions - impostor rule

The impostor rule is a principle in commercial law that states that an impostor's endorsement of a negotiable instrument is not considered forgery. Instead, the drawer or maker who issued the instrument to the impostor is considered negligent and therefore liable to the holder for payment.

For example, if someone pretends to be a payee and receives a check from the drawer or maker, any forgery of the payee's name on the check will be considered valid if the check is paid by someone in good faith or taken for value or collection.

This means that the person who issued the check to the impostor is responsible for any losses incurred by the holder of the check due to the impostor's actions.