400.3-406. Negligence contributing to forged signature or alteration of instrument. - Missouri Statutes

Negligence contributing to forged signature or alteration ofinstrument.

400.3-406. (a) A person whose failure to exercise ordinarycare substantially contributes to an alteration of an instrumentor to the making of a forged signature on an instrument isprecluded from asserting the alteration or the forgery against aperson who, in good faith, pays the instrument or takes it forvalue or for collection.

(b) Under subsection (a), if the person asserting thepreclusion fails to exercise ordinary care in paying or takingthe instrument and that failure substantially contributes toloss, the loss is allocated between the person precluded and theperson asserting the preclusion according to the extent to whichthe failure of each to exercise ordinary care contributed to theloss.

(c) Under subsection (a), the burden of proving failure toexercise ordinary care is on the person asserting the preclusion.Under subsection (b), the burden of proving failure to exerciseordinary care is on the person precluded.

(L. 1963 p. 503 § 3-406, A.L. 1992 S.B. 448)