[1] This can be when the maker or drawer of a negotiable instrument, such as a promissory note or check, is induced to sign the instrument without a reasonable opportunity to learn of its fraudulent character or essential terms.
Determination of whether an act constitutes fraud in the factum depends upon consideration of "all relevant factors".
Fraud in the factum usually voids the instrument under state law and is a real defense against even a holder in due course.
Contrast this with the situation where a trusted employee signs a check without permission.
Here, the employer had a reasonable opportunity to avoid the obligation by restricting access to the checks.