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Can you summarize 42a CTGS Article 4, Section 406?
Bank Deposits and Collections - Secs. 42a-4-101 to 42a-4-504 > Customer's duty to discover and report unauthorized signature or alteration.
Short Summary
This legal document, part of the General Statutes of Connecticut and the Uniform Commercial Code, specifically Bank Deposits and Collections, outlines the duty of customers to discover and report unauthorized signatures or alterations. According to the document, banks are required to provide customers with statements of account that sufficiently identify the items paid. If the items are not returned, the bank must retain them or provide legible copies. Customers are expected to promptly examine the statements or items and notify the bank if any unauthorized payments are discovered. Failure to comply with this duty may preclude the customer from asserting unauthorized signatures or alterations against the bank. However, if the bank fails to exercise ordinary care or does not pay the item in good faith, the preclusion may not apply. Additionally, if the customer does not discover and report unauthorized signatures or alterations within one year, they may be precluded from asserting such claims against the bank. The document also mentions the possibility of reducing the one-year time frame through an agreement between the bank and the customer. Overall, this document establishes the responsibilities and potential consequences for customers and banks regarding unauthorized signatures or alterations.
Whom does it apply to?
Customers and banks
What does it govern?
Customer's duty to discover and report unauthorized signature or alteration
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
Connecticut