Section 45.03.406. 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 (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 (a) of this section, the burden of proving failure to exercise ordinary care is on the person asserting the preclusion. Under (b) of this section, the burden of proving failure to exercise ordinary care is on the person precluded.

Authorities

45.03.417;45.04.208

Notes

References

AS 45.03.417 Presentment warranties.
AS 45.04.208 Presentment warranties.

History

(Sec. 3.406 ch 114 SLA 1962; am Sec. 53 ch 35 SLA 1993)