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Can you summarize ARCO 4-4-406?
Relationship Between Payor Bank and Its Customer > Customer's duty to discover and report unauthorized signature or alteration Comparative fault.
Short Summary
This legal document, part of the Arkansas Code under the Uniform Commercial Code, specifically addresses the duty of customers to discover and report unauthorized signatures or alterations on bank items. It applies to customers and banks involved in bank deposits and collections. The document outlines the responsibilities of banks to provide statements of account and return or make available the items paid to customers. It also requires customers to exercise reasonable promptness in examining the statements or items and promptly 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 also addresses the allocation of loss between the customer and the bank based on their respective failures. Additionally, it establishes a one-year time limit for customers to discover and report unauthorized signatures or alterations. Overall, the document aims to regulate the relationship between payor banks and their customers in the context of unauthorized signatures or alterations.
Whom does it apply to?
Customers and banks involved in bank deposits and collections
What does it govern?
Customer's duty to discover and report unauthorized signature or alteration Comparative fault
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
Arkansas