A company called Media Edge made a check out to CMP Media for $133,026 to be drawn from its Wachovia Bank account. A woman named Choi somehow came into possession of this check and deposited it in her account at Foster Bank. Wachovia cashed the check and later realized either the name had been

“chemically washed” (scraped away) or the entire check had been forged. An original copy of the check was destroyed, and all that remained was a digital copy. Being unable to decide whether the check was altered or forged, the court had to decide whether the liability should fall on Wachovia Bank or Foster Bank.

CASE QUESTIONS

1. If the court had found that the check was altered through a chemical wash, which bank would face liability?

2. If the court had found that the check was forged, which bank would face liability?