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When most people think of “forgery” and business contracts, an image comes to mind of a forged signature on a contract or maybe a forged signature on the back of a paper check. Indeed, most of the case law with respect to “forgery” relates to negotiable instruments. However, forgery also consists of modifying a check, like adding an extra “zero” to the check amount. As many also know, under California law, forgery is a crime. See Cal. Penal Code, §§ 470 & 476.
With respect to San Diego business contracts, the issue of “forgery” has become more complex because of electronic communications and the fact that a “signature” now can be an electronic “mark.” We will discuss those issues below. In general, if a signature or mark is forged or falsified, the forgery will have the effect of nullifying the purported contract. Here is a discussion of some of the legal issues.
San Diego Corporate Law: Types of “Signatures”
Under modern statutory and case law, a “signature” is no longer just a formal cursive signing of one’s name in ink on a piece of paper. Under statutory provisions like the Uniform Commercial Code, a signature may consist of any word, mark, or symbol that is executed or adopted by a person “who has the present intention to authenticate a writing.” Just as important for issues of contract formation, contracts can come into legal existence without any signature of any sort or type. In this way, the legal issue of forgery has become much more complex.
San Diego Corporate Law: Why a “Signature” Matters and Defining “Forgery”
In general, under the law, a signature is an indication of “acceptance.” For a contract to be formed, there must be an offer, acceptance, consideration and meeting of the minds with respect to what the parties have agreed to do. A forged signature causes a contract to be nullified because a forged signature is not valid acceptance — there is no intent to be bound by the contract.
“Forgery” is defined in several ways:
- Signing the name of another person without authority
- Counterfeiting the seal or mark of another without authority
- Counterfeiting or forging the handwriting of another
- Passing off something known to be false as the signature, handwriting, or mark of another
Note that “without authority” is important. Under many circumstances, a person may give to another the power to sign his or her name. Likewise, a person may ratify someone else’s signing of that name. In a commonplace example, a husband may sign his wife’s name for a package that arrives in the mail. Technically, the husband has forged his wife’s signature, but he may have explicit or implicit authority and, after the fact, the wife may express her ratification of the “forgery” as she opens her package.
Under criminal law, there is also an intent element to “forgery.” That is, the purpose of the forged signature is to defraud or obtain some benefit for oneself. In the husband/wife example, there is no intent to defraud. However, if we change the example, we can see the difference. Let’s modify the example so that it is not the husband, but rather the next-door neighbor, who forges the wife’s signature. Further, rather than leaving the package for the wife, the neighbor steals the package. Now, we have the intent element required of criminal forgery.
Note finally that forgery is to be distinguished from mistake and from fraudulent inducement. With forgery, one is stating as a factual matter, “That is not my signature.” This is distinct from saying, “Yes, that is my signature, but it was a mistake. I did not mean to sign THAT contract.” Or “Yes, that is my signature, but I was tricked into signing the contract.” The first is an example of a mistaken signature and the second is an example of a signature procured through fraud. All three – forgery, mistake, and fraud — can be used as defenses to a claim of breach of contract. Under such defenses, a San Diego business contract will be considered void and unenforceable by California courts.
Call San Diego Corporate Law Today
For more information, call experienced business attorney Michael Leonard, Esq., of San Diego Corporate Law. Good, well-drafted contracts that are properly signed and executed are essential to protect you and your business. Call Mr. Leonard at (858) 483-9200 or contact him via email. Mr. Leonard’s law practice is focused on business, transactional, and corporate matters and assists business owners in San Diego and the surrounding communities.