Okla. Stat. tit. 12A § 3-402

Current through Laws 2024, c. 453.

Section 3-402 - Signature by Representative

(a) If a person acting, or purporting to act, as a representative signs an instrument by signing either the name of the represented person or the name of the signer, the represented person is bound by the signature to the same extent the represented person would be bound if the signature were on a simple contract. If the represented person is bound, the signature of the representative is the "authorized signature of the represented person" and the represented person is liable on the instrument, whether or not identified in the instrument.

(b) If a representative signs the name of the representative to an instrument and the signature is an authorized signature of the represented person, the following rules apply:

(1) If the form of the signature shows unambiguously that the signature is made on behalf of the represented person who is identified in the instrument, the representative is not liable on the instrument; and

(2) Subject to subsection (c) of this section, if (i) the form of the signature does not show unambiguously that the signature is made in a representative capacity or (ii) the represented person is not identified in the instrument, the representative is liable on the instrument to a holder in due course that took the instrument without notice that the representative was not intended to be liable on the instrument. With respect to any other person, the representative is liable on the instrument unless the representative proves that the original parties did not intend the representative to be liable on the instrument.

(c) If a representative signs the name of the representative as drawer of a check without indication of the representative status and the check is payable from an account of the represented person who is identified on the check, the signer is not liable on the check if the signature is an authorized signature of the represented person.

Okla. Stat. tit. 12A, § 3-402

Laws 1961, p. 110, § 3-402; Amended by Laws 1991, SB 25, c. 117, § 65, eff. 1/1/1992.

Oklahoma Code Comment

Section 3-402 and the Official UCC Comments to it provide that the law of agency will govern the determination of whether a represented person will be bound by the act of a representative. Together with Section 3-401 , this Section clarifies that an undisclosed principal may be bound on an instrument. This changes the result under the old Uniform Negotiable Instruments Law and pre-revision Article 3, which did not make an undisclosed principal liable on the instrument. See Britton v. Mitchell, 361 F.2d 922 (lOth Cir. 1966).

Section 3-402 also changes Oklahoma law with respect to the liability of a representative in certain other circumstances. Prior Oklahoma cases held authorized representatives personally liable on checks drawn on the principal's account where the representative's capacity was not indicated on the check. See. e.g., American Exchange Bank Collinsville, Okla. v. Cessna, 386 F.Supp. 494 (N.D. Okla. 1974); A.L. Jackson Chevrolet, Inc. v. Oxley, 564 P.2d 633 (Okla. 1977); Guaranty Nat'l Bank v. Beaver, 738 P.2d 1336 (Okla. 1987). Cf American Bank of Commerce v. Boger-Hare Mfg. Co., 633 P.2d 1270, 1272 (Okla. Ct. App. 1981) (same result with regard to notes). Section 3-402 rejects those cases with regard to checks by providing that the representative is not personally liable so long as the corporation is identified on the check.

In addition, as against all persons other than a holder in due course without notice of the intention not to be liable, subsection (b)(2) will always allow a representative to prove his or her signature on an instrument was made solely in a representative capacity, even if that capacity is not indicated. This result concurs with prior Oklahoma case law, which generously allowed the admission of parol evidence to establish a signatory's true capacity. See Moore v. White, 603 P.2d 1119 (Okla. 1979); Guaranty Nat'l Bank v. Beaver, 738 P.2d 1336 (Okla. 1987). It will overturn some older, stricter cases, such as Weagant v. Camden, 37 Okla. 508, 132 P. 487 (1913), and Keokuk Falls Improvement Co. v. Kingsland & Douglas Manufacturing Co., 5 Okla. 32, 47 P. 484 (1896). Where the representative capacity is indicated on the instrument, this provision generally will continue prior Oklahoma law. See Harris v. Milam, 389 P.2d 638 (Okla. 1964) (corporate designation and signers' corporate offices appeared under individuals' signatures; parol evidence allowed to show intent that corporation was solely liable on note).