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Section: 400.003.0406 Negligence contributing to forged signature or alteration of instrument. RSMO 400.03-406


Published: 2015

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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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