Print
The Vermont Statutes Online
Title
09A
:
Uniform Commercial Code
Chapter
003
:
Commercial Paper
§
3-406. Negligence contributing to forged signature or alteration of instrument
(a) A person
whose failure to exercise ordinary care substantially contributes to an
alteration of an instrument or to the making of a forged signature on an
instrument is precluded from asserting the alteration or the forgery against a
person who, in good faith, pays the instrument or takes it for value or for
collection.
(b) Under
subsection (a) of this section, if the person asserting the preclusion fails to
exercise ordinary care in paying or taking the instrument and that failure
substantially contributes to loss, the loss is allocated between the person
precluded and the person asserting the preclusion according to the extent to
which the failure of each to exercise ordinary care contributed to the loss.
(c) Under
subsection (a) of this section, the burden of proving failure to exercise
ordinary care is on the person asserting the preclusion. Under subsection (b)
of this section, the burden of proving failure to exercise ordinary care is on
the person precluded. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1,
1995.)