75A-1-208. Checks drawn in name of a principal.
(1) If a fiduciary draws a check upon the account of the fiduciary's principal in a bank that is authorized to draw checks upon the principal's account and the bank is authorized to pay the check, the bank is not liable to the principal unless: the bank pays the check with actual knowledge that the fiduciary is committing a breach of the fiduciary's obligation in drawing the check; or the bank knows that paying the check amounts to bad faith.
(2) Notwithstanding Subsection (1), the bank is liable to a principal if: the principal's fiduciary deposits a check in the name of the principal as payment to the bank for payment of, or as security for, a personal debt of the fiduciary; and the fiduciary commits a breach of the fiduciary's obligation in drawing or delivering the check to the bank.