Rules for Stamped Signatures on Checks

By Charles Mathewson
Rules, Stamped Signatures, Checks
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What we commonly call a check, is also known as an "instrument" in legal terms. Every check requires two signatures in order to be paid. The "maker" must sign the front and the "drawer" signs the back. These rules are the same for stamped signatures on checks. In the United States, Section 3 of the Uniform Commercial Code (UCC), outlines all the rules for the negotiation of checks including stamped signatures on checks.

Signature Required

A signature can be handmade, made by a rubber stamp, printed by computer or any other device. According to the UCC: "A signature may be made (i) manually or by means of a device or machine, and (ii) by the use of any name, including a trade or assumed name, or by a word, mark, or symbol executed or adopted by a person with present intention to authenticate a writing."

Forgery

If a person or a bank accepts a forged check the person or bank accepting the check is normally liable for the mistake unless they can prove fraud or negligence. A person or bank accepting a forged check with a stamped signature must prove someone used a stamp without permission and with the intent to steal. Intent can be difficult to prove because it involves state of mind.

Negligence

According to Section 3-406 of the UCC, if a person or business leaves check stock and signature stamps unsecured, they cannot assert damage by forgery even if they can prove intent on the part of the forger. Either party to a check is liable for forgery by a third party unless they've taken "ordinary care in paying or taking the instrument." However, the bank can assert it is not liable to pay because of the account holder's negligence.

Common Practice Safeguards

Though not a rule, as a general practice, stamped signatures on the back of checks include the words "For Deposit Only." This tells the bank not give cash to the person who presents the check for payment. This practice helps prevent fraud if the check is stolen.

About the Author

Charles Mathewson is a freelance writer residing in Plymouth, Mass. He worked as a newspaper reporter and editor beginning in 1988 for "Memorial Press Group" in Plymouth, Mass. and the "Brockton Enterprise." He has also published on Patch.com. Mathewson earned a Bachelor of Arts degree from Goddard College. He was selected to participate in the Nieman Seminar for Narrative Editors at Harvard University.