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Can you summarize LARS 10.4-406?
RELATIONSHIP BETWEEN PAYOR BANK AND ITS CUSTOMERS > Customer's duty to discover and report unauthorized signature or alteration
Short Summary
This legal document, part of the Louisiana Revised Statutes, governs the relationship between a payor bank and its customers in the context of bank deposits and collections. It outlines the duties and responsibilities of the bank in providing statements of account and returning or making available the paid items to the customer. The document also specifies the customer’s duty to promptly examine the statement or items and report any unauthorized payment due to alteration or unauthorized signature. Failure to comply with these duties may preclude the customer from asserting against the bank the unauthorized signature or alteration. However, if the bank fails to exercise ordinary care in paying the item and the failure contributes to the loss, the loss is allocated between the customer and the bank. Additionally, the document sets a one-year time limit for discovering and reporting unauthorized signatures or alterations, after which the customer is precluded from asserting against the bank. Breach of warranty claims related to unauthorized signatures or alterations are also addressed. No specific exemptions or penalties are mentioned in this document.
Whom does it apply to?
Customers of a bank
What does it govern?
Relationship between payor bank and its customers
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Louisiana