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Can you summarize IACO 554.3406?
UNIFORM COMMERCIAL CODE > Negligence contributing to forged signature or alteration of instrument.
Short Summary
This legal provision, found in the Iowa Code under the Uniform Commercial Code, addresses the issue of negligence contributing to the alteration of an instrument or the making of a forged signature on an instrument. According to this provision, a person who fails to exercise ordinary care and substantially contributes to such alteration or forgery cannot assert it against a person who, in good faith, pays the instrument or takes it for value or collection. If the person asserting the preclusion also fails to exercise ordinary care and contributes to a loss, the loss is allocated between the precluded person and the person asserting the preclusion based on their respective failures to exercise ordinary care. The burden of proving failure to exercise ordinary care is on the person asserting the preclusion in the first scenario, and on the person precluded in the second scenario. This provision aims to establish liability and allocate losses in cases involving alterations or forged signatures on instruments.
Whom does it apply to?
All persons involved in the alteration of an instrument or the making of a forged signature on an instrument
What does it govern?
Negligence contributing to forged signature or alteration of instrument
What are exemptions?
No exemptions are mentioned
What are the Penalties?
No specific penalties are mentioned
Jurisdiction
Iowa