New Jersey § 12a:3-405

§ 12a:3-405.

a. As used in this section: (1) “ Employee ” includes an independent contractor and employee of an independent contractor retained

by the employer. (2) “Fraudulent indorsement” means, in the case of an instrument payable to the employer,

a forged indorsement purporting to be that of the employer, or, in the case of an

instrument with respect to which the employer is the issuer, a forged indorsement

purporting to be that of the person identified as payee. (3) “ Responsibility ” with respect to instruments means authority to: sign or indorse instruments on

behalf of the employer; process instruments received by the employer for bookkeeping

purposes, for deposit to an account, or for other disposition; prepare or process

instruments for issue in the name of the employer; supply information determining

the names or addresses of payees of instruments to be issued in the name of the employer;

control the disposition of instruments to be issued in the name of the employer;

or act otherwise with respect to instruments in a responsible capacity. “Responsibility” does not include authority that merely allows an employee to have

access to instruments or blank or incomplete instrument forms that are being stored

or transported or are part of incoming or outgoing mail, or similar access. b. For the purpose of determining the rights and liabilities of a person who, in good

faith, pays an instrument or takes it for value or for collection, if an employer

entrusted an employee with responsibility with respect to the instrument and the employee

or a person acting in concert with the employee makes a fraudulent indorsement of

the instrument, the indorsement is effective as the indorsement of the person to whom

the instrument is payable if it is made in the name of that person. If the person paying the instrument or taking it for value or for collection fails

to exercise ordinary care in paying or taking the instrument and that failure substantially

contributes to loss resulting from the fraud, the person bearing the loss may recover

from the person failing to exercise ordinary care to the extent the failure to exercise

ordinary care contributed to the loss. c. Under subsection b. of this section, an indorsement is made in the name of the

person to whom an instrument is payable if it is made in a name substantially similar

to the name of that person or the instrument, whether or not indorsed, is deposited

in a depositary bank to an account in a name substantially similar to the name of

that person.