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Can you summarize 55-4-406 NMSA?
RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMER > Customer's duty to discover and report unauthorized signature or alteration.
Short Summary
This legal document, part of the New Mexico Statutes Annotated 1978, specifically addresses the duty of customers to discover and report unauthorized signatures or alterations. It applies to customers of banks. The document outlines the responsibilities of banks in providing statements of account and returning or making available the items paid. It also establishes the duty of customers to promptly examine the statements or items and notify the bank of any unauthorized payments. Failure to comply with these duties may preclude the customer from asserting unauthorized signatures or alterations against the bank. The document further discusses the allocation of loss between the customer and the bank based on their respective failures to comply with their duties. Additionally, it sets a one-year time limit for customers to discover and report unauthorized signatures or alterations. Breach of these duties may result in the customer being precluded from asserting claims against the bank. Overall, the document aims to ensure prompt detection and reporting of unauthorized signatures or alterations in banking transactions.
Whom does it apply to?
Customers of 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?
The customer may be precluded from asserting against the bank the unauthorized signature or alteration if the bank proves that the customer failed to comply with their duties and the bank suffered a loss as a result.
Jurisdiction
New Mexico