Utah Code 75A-1-208. Checks drawn in name of a principal
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(1) If a fiduciary draws a check upon the account of the fiduciary‘s principal in a bank that is authorized to draw checks upon the principal’s account and the bank is authorized to pay the check, the bank is not liable to the principal unless:
Terms Used In Utah Code 75A-1-208
- Fiduciary: A trustee, executor, or administrator.
- Fiduciary: means :(1)(a) a trustee under any trust, expressed, implied, resulting or constructive;(1)(b) an executor;(1)(c) an administrator;(1)(d) a guardian;(1)(e) a conservator;(1)(f) a curator;(1)(g) a receiver;(1)(h) a trustee in bankruptcy;(1)(i) an assignee for the benefit of creditors;(1)(j) a partner;(1)(k) an agent;(1)(l) an officer of a corporation, public or private;(1)(m) a public officer; or(1)(nn) any other person acting in a fiduciary capacity for any person, trust, or estate. See Utah Code 75A-1-201
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Principal: means a person to whom a fiduciary owes an obligation. See Utah Code 75A-1-201
(1)(a) the bank pays the check with actual knowledge that the fiduciary is committing a breach of the fiduciary’s obligation in drawing the check; or(1)(b) the bank knows that paying the check amounts to bad faith.
(2) Notwithstanding Subsection (1), the bank is liable to a principal if:
(2)(a) the principal’s fiduciary deposits a check in the name of the principal as payment to the bank for payment of, or as security for, a personal debt of the fiduciary; and
(2)(b) the fiduciary commits a breach of the fiduciary’s obligation in drawing or delivering the check to the bank.