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Illinois Compiled Statutes

810 ILCS 5/3-307 (2026)

Notice of breach of fiduciary duty

✓ current as of May 2026
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(810 ILCS 5/3-307) (from Ch. 26, par. 3-307)
    Sec. 3-307. Notice of breach of fiduciary duty.
    (a) In this Section:
        (1) "Fiduciary" means an agent, trustee, partner,
    
corporate officer or director, or other representative owing a fiduciary duty with respect to an instrument.
        (2) "Represented person" means the principal,
    
beneficiary, partnership, corporation, or other person to whom the duty stated in paragraph (1) is owed.
    (b) If (i) an instrument is taken from a fiduciary for payment or collection or for value, (ii) the taker has knowledge of the fiduciary status of the fiduciary, and (iii) the represented person makes 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:
        (1) Notice of breach of fiduciary duty by the
    
fiduciary is notice of the claim of the represented person.
        (2) 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 (i) taken in payment of or as security for a debt known by the taker to be the personal debt of the fiduciary, (ii) taken in a transaction known by the taker to be for the personal benefit of the fiduciary, or (iii) deposited to an account other than an account of the fiduciary, as such, or an account of the represented person.
        (3) 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.
        (4) If an instrument is issued by the represented
    
person or the fiduciary, as such, to the taker as payee, the taker has notice of the breach of fiduciary duty if the instrument is (i) taken in payment of or as security for a debt known by the taker to be the personal debt of the fiduciary, (ii) taken in a transaction known by the taker to be for the personal benefit of the fiduciary, or (iii) deposited to an account other than an account of the fiduciary, as such, or an account of the represented person.
(Source: P.A. 87-582; 87-1135.)

    
Notes of Decisions
Cited in 4 cases, 2001–2018 · leading case: Falk v. N. Trust Co., 763 N.E.2d 380 (Ill. App. Ct. 2001).
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Falk v. N. Trust Co., 763 N.E.2d 380 (Ill. App. Ct. 2001). “) 810 ILCS 5/3-307(b)(4) ( West 1992 ). The second amended complaint alleged that the Bank had actual knowledge of the fiduciary relationship between Ms.”
Mikrut v. First Bank of Oak Park (Ill. App. Ct. 2005). · cites it 2× “" 810 ILCS 5/3-307(b)(2), (b)(4) (West 2000).”
Travelers Cas. & Sur. Co. of Am. v. Paderta, 315 F. Supp. 3d 1096 (E.D. Ill. 2018). “Despite the clear statutory definition that notice includes constructive knowledge, Fifth Third cites 810 ILCS 5/3-307 in support of its argument that it had to have actual notice of any claim to take priority.”
Travelers Cas. & Sur. Co. of Am. v. Paderta (N.D. Ill. 2018). “Despite the clear statutory definition that notice includes constructive knowledge, Fifth Third cites 810 ILCS 5/3-307 in support of its argument that it had to have actual notice of any claim to take priority.”
— 810 ILCS 5/3-307(b)(2) — 1 case
Mikrut v. First Bank of Oak Park (Ill. App. Ct. 2005). “" 810 ILCS 5/3-307(b)(2), (b)(4) (West 2000).”
— 810 ILCS 5/3-307(b)(4) — 2 cases
Falk v. N. Trust Co., 763 N.E.2d 380 (Ill. App. Ct. 2001). “) 810 ILCS 5/3-307(b)(4) ( West 1992 ). The second amended complaint alleged that the Bank had actual knowledge of the fiduciary relationship between Ms.”
Mikrut v. First Bank of Oak Park (Ill. App. Ct. 2005). “" 810 ILCS 5/3-307(b)(2), (b)(4) (West 2000).”
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