Section 75A-1-205 - Checks - Drawn by a fiduciary and payable to a third person(1) If a fiduciary draws a check or other bill of exchange in the name of the fiduciary's principal and the fiduciary has authority to draw the check or other bill of exchange in the name of the principal, the person to which the check or other bill of exchange is paid:(a) is not bound to inquire as to whether the fiduciary is committing a breach of the fiduciary's obligation in drawing the check or other bill of exchange; and(b) is not required to provide notice that the fiduciary is committing a breach of the fiduciary's obligation, unless the person:(i) takes the check or other bill of exchange with actual knowledge that the fiduciary is committing a breach of the fiduciary's obligation; or(ii) knows that taking the check or other bill of exchange amounts to bad faith.(2) Notwithstanding Subsection (1), a person is liable to a principal if: (a) the fiduciary writes and delivers the check or other bill of exchange to the person;(b) the person knows that the fiduciary is drawing and delivering the check or other bill of exchange for: (i) payment of, or as a security for, a personal debt of the fiduciary; or(ii) the personal benefit of the fiduciary; and(c) the fiduciary commits a breach of the fiduciary's obligation in drawing or delivering the check or other bill of exchange to the person.Renumbered from § 22-1-5 and amended by Chapter 364, 2024 General Session ,§ 18, eff. 9/1/2024.Amended by Chapter 365, 2024 General Session ,§ 42, eff. 5/1/2024.