Missouri Revised Statutes
Chapter 400
Uniform Commercial Code
←400.03-405
Section 400.3-406.1
400.03-407→
August 28, 2015
Negligence contributing to forged signature or alteration of instrument.
400.3-406. (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), 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), the burden of proving failure to exercise
ordinary care is on the person asserting the preclusion. Under subsection
(b), the burden of proving failure to exercise ordinary care is on the person
precluded.
(L. 1963 p. 503 § 3-406, A.L. 1992 S.B. 448)
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