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Can you summarize FLCL 674.406?
RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMER (ss. 674.401-674.407) > Customers duty to discover and report unauthorized signature or alteration.
Short Summary
This legal document, found in the Florida Statutes under the Uniform Commercial Code: Bank Deposits and Collections, outlines the duty of customers to discover and report unauthorized signatures or alterations. According to the document, if a bank sends a statement of account or items to a customer, the customer must promptly examine them to determine if any payment was unauthorized due to an alteration or unauthorized signature. If the customer should have reasonably discovered the unauthorized payment based on the provided statement or items, they must promptly notify the bank. Failure to comply with these duties may preclude the customer from asserting against the bank the unauthorized signature or alteration. The document also addresses the allocation of loss between the customer and the bank if the bank failed to exercise ordinary care in paying the item. Additionally, it sets a time limit for customers to discover and report unauthorized signatures, alterations, or endorsements. If the customer fails to do so within the specified timeframes, they may be precluded from asserting against the bank. The document does not mention any specific exemptions or penalties.
Whom does it apply to?
Customers of banks
What does it govern?
Customers 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
Florida