Digitech Corporation(DC) pays its employees every two weeks. Eve Anderson, an employee, gets her paycheck, indorses the back of the check by signing her name using her normal signature that she uses whenever signing which is pretty much an illegible mark. On her lunch break she goes to cash it at DC's Bank, the First Depository Bank(FDB). On the street on her way to the Bank in a crowd she loses the check. Greg "Cheetah" Smith finds the check and immediately signs the back of the check beneath Eve's signature and cashes it. Has the check been negotiated to Greg? Once signed by Eve what type of instrument is the check? Can the fact that Eve did not legibly sign her name on the back of the check be used by her as a defense to payment on the check to Greg? What precautions might Eve have taken to avoid this issue? What about use of UCC 4-403? Is it applicable at all? Please be sure to address each question posed above
Digitech Corporation(DC) pays its employees every two weeks. Eve Anderson, an employee, gets her paycheck, indorses the back of the check by signing her name using her normal signature that she uses whenever signing which is pretty much an illegible mark. On her lunch break she goes to cash it at DC's Bank, the First Depository Bank(FDB). On the street on her way to the Bank in a crowd she loses the check. Greg "Cheetah" Smith finds the check and immediately signs the back of the check beneath Eve's signature and cashes it. Has the check been negotiated to Greg? Once signed by Eve what type of instrument is the check? Can the fact that Eve did not legibly sign her name on the back of the check be used by her as a defense to payment on the check to Greg? What precautions might Eve have taken to avoid this issue? What about use of UCC 4-403? Is it applicable at all? Please be sure to address each question posed above.
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