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Posts tagged "UCC"

Massachusetts Court Finds Bank Not Liable for IOLTA Scam Loss

The Business Litigation Session of the Massachusetts Superior Court has joined other courts in holding that a bank is not liable to its customer for wiring money to a foreign account at the customer's instruction. The Plaintiff, Sarrouf Law LLP ("Sarrouf"), alleged negligence and breach of the California Uniform Commercial Code, but the Court found that the UCC expressly displaced common law and that the bank's conduct comported with the UCC's requirements. Sarrouf Law LLP v. First Republic Bank, No. SUCV2016-03069-BLS1 (Mass.Super. Aug. 2, 2018).

Beware the Convention on the International Sale of Goods

Would it surprise you to learn that when you see a clause in your international sales contract stating that Massachusetts (or any other State's) law applies, that it actually incorporates an international treaty that will likely supersede the Uniform Commercial Code ("UCC")?

Sixth Circuit Joins Majority in Rejecting Discovery Rule for UCC Check Conversion Claims

The United States Court of Appeals for the Sixth Circuit has joined with the majority of courts in rejecting application of the discovery rule for check conversion claims under the Uniform Commercial Code ("UCC"). In Pate v. Huntington Nat'l Bank, et al., 560 Fed.Appx. 506 (2014), the Sixth Circuit addressed the application of Ohio's general statutory discovery rule for the wrongful taking of personal property in the context of check conversion subject to UCC § 3-118(g). Ohio Rev. Code § 2305.09 provides that a cause for wrongful taking of personal property "shall not accrue until the wrongdoer is discovered." UCC § 3-118(g), on the other hand, provides that an action for conversion "must be commenced within three years after the cause of action accrues."

Mississippi Joins Jurisdictions Approving Contractual Reduction of Check Fraud Reporting Deadline

Mississippi has joined the growing list of jurisdictions that have approved contractual reductions of the one-year reporting deadline for certain check fraud claims found in Uniform Commercial Code ("UCC") section 4-406(f). In Century Construction Co., LLC v. BancorpSouth Bank, 117 So.3d 345, 80 UCC Rep.2d 1073 (Miss. Ct. App. 2013), the Mississippi Court of Appeals found that a term in the customer's deposit account agreement requiring the customer to report check fraud claims within 60 days of the issuance of the account statement listing the subject check was valid and enforceable.

UCC Article 9 Damages Provisions Displace Common Law

In a case handed down just last month, the Supreme Judicial Court reinforced the long-standing rule that provisions of the Uniform Commercial Code (the "UCC") displace common law principles that would otherwise apply in contexts not governed by the UCC.

The "Same Wrongdoer" Defense In Check Fraud Litigation

In "check fraud" litigation, bank customers often sue their banks after learning that someone has made a forged or otherwise unauthorized signature on the front of one or more of the customer's checks. It often turns out that the fraudster has perpetrated the scheme over a long period of time and has made unauthorized signatures on many different checks. This article offers a brief overview of the "same wrongdoer" rule, an important defense that is available to banks in such cases under the Uniform Commercial Code ("UCC") as adopted in Massachusetts.

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