Legal Definitions - unauthorized completion

Unauthorized completion refers to the act of filling in missing details on a financial document, known as a negotiable instrument, either without any proper permission to do so or by exceeding the specific permission that was granted. A negotiable instrument is a written promise or order to pay a specific sum of money, such as a check, a promissory note, or certain types of payment orders.

When someone completes such a document without the owner's consent, or adds information that goes beyond what they were explicitly allowed to do, it is considered an unauthorized completion. This act can serve as a legal argument (a "personal defense") for the original signer to avoid payment against certain individuals who later possess the instrument.

• Example 1: The Blank Check Misuse

  Situation: David asks his neighbor, Emily, to pick up some supplies for his home renovation project. He signs a check and gives it to her, leaving the amount blank, with the understanding that she will call him with the exact total before filling it in. Instead, Emily fills in a significantly higher amount than the cost of the supplies, adds extra money for herself, and cashes the check.

  Explanation: Emily engaged in unauthorized completion because she filled in the missing amount on a negotiable instrument (the check) without the specific authority to determine the final sum, and certainly beyond any implied authority for the supplies. David could argue that he should not be liable for the inflated amount due to this unauthorized completion.

• Example 2: Agent Exceeding Loan Authority

  Situation: A small business owner, Ms. Rodriguez, instructs her financial agent, Mr. Lee, to secure a short-term loan for inventory, specifying that the promissory note should not exceed $10,000. Mr. Lee, facing personal financial difficulties, completes the promissory note for $15,000, signing it on behalf of Ms. Rodriguez's business.

  Explanation: Mr. Lee committed unauthorized completion because he completed the negotiable instrument (the promissory note) for an amount that went beyond the explicit authority granted to him by Ms. Rodriguez. The business could use this as a defense to avoid paying the additional $5,000 if the note is presented for payment by certain parties.

• Example 3: Unapproved Invoice Adjustment

  Situation: A client, Mr. Kim, provides a contractor with a signed payment authorization form for a specific project, leaving the final payment amount blank pending a final review of the completed work and any agreed-upon change orders. Before Mr. Kim approves the final figures, the contractor unilaterally fills in a higher amount on the form, including charges for additional work that was never discussed or approved by Mr. Kim.

  Explanation: The contractor's action constitutes unauthorized completion because they filled in the missing cost information on the payment authorization without Mr. Kim's final approval and beyond the scope of their agreed-upon authority. Mr. Kim could challenge the inflated charges based on this unauthorized completion.