Unauthorized Completion of Note
Igor Ito signs a note leaving the payee and amount blank. A later holder adds words and numbers without authority. The addition constitutes an alteration of the incomplete instrument under the governing rule.
Also known as: inchoate instruments · incomplete instrument
Written by attorneys · grounded in primary & secondary sources — see below
An unrecorded instrument that must by law be recorded to serve as effective notice to third parties. Until recorded the instrument binds only the immediate parties.
Select any source to read its text and confirm it supports the definition.
Igor Ito signs a note leaving the payee and amount blank. A later holder adds words and numbers without authority. The addition constitutes an alteration of the incomplete instrument under the governing rule.
Island Manufacturing entrusts an employee with authority to prepare checks. The employee forges indorsements on unissued instruments. The employer's responsibility for the instruments determines liability allocation.
Recording is required by law before the instrument provides effective notice to third parties. Until that step occurs the instrument remains effective solely between the original parties.
Supporting sources
An inchoate instrument is an unrecorded writing whose legal effect against third parties awaits recording. An incomplete instrument is a signed writing that lacks essential terms the signer intended to supply later.
Supporting sources
The addition qualifies as an alteration. The person asserting lack of authority bears the burden of proof under the applicable UCC provision.
Supporting sources