§ 554.3307 — Notice of breach of fiduciary duty

Iowa § 554.3307

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 554: UNIFORM COMMERCIAL CODE

Text

1. In this section:
a. “Fiduciary” means an agent, trustee, partner, corporate officer or director, or other
representative owing a fiduciary duty with respect to an instrument.
b. “Represented person” means the principal, beneficiary, partnership, corporation, or
other person to whom the duty stated in paragraph “a” is owed.
2. If an instrument is taken from a fiduciary for payment or collection or for value, the
takerhasknowledgeofthefiduciarystatusofthefiduciary,andtherepresentedpersonmakes
a claim to the instrument or its proceeds on the basis that the transaction of the fiduciary is
a breach of fiduciary duty, the following rules apply:
a. Notice of breach of fiduciary duty by the fiduciary is notice of the claim of the
represented person.
b. In the case of an instrument payable to the represented person or the fiduciary as such,
the taker has notice of the breach of fiduciary duty if the instrument is taken in payment of or
as security for a debt known by the taker to be the personal debt of the fiduciary, taken in a
transaction known by the taker to be for the personal benefit of the fiduciary, or deposited to
an account other than an account of the fiduciary, as such, or an account of the represented
person.
c. If an instrument is issued by the represented person or the fiduciary as such, and made
payable to the fiduciary personally, the taker does not have notice of the breach of fiduciary
duty unless the taker knows of the breach of fiduciary duty.
d. If an instrument is issued by the represented person or the fiduciary as such, to the
takeraspayee, thetakerhasnoticeofthebreachoffiduciarydutyiftheinstrumentistakenin
paymentoforassecurityforadebtknownbythetakertobethepersonaldebtofthefiduciary,
taken in a transaction known by the taker to be for the personal benefit of the fiduciary, or
deposited to an account other than an account of the fiduciary, as such, or an account of the
represented person.