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Can you summarize MNST 336.4-406?
UNIFORM COMMERCIAL CODE > CUSTOMER'S DUTY TO DISCOVER AND REPORT UNAUTHORIZED SIGNATURE OR ALTERATION.
Short Summary
This legal document, governed by the Minnesota Statutes under the Uniform Commercial Code, outlines the customer’s duty to discover and report unauthorized signatures or alterations in banking transactions. It establishes the responsibilities of both banks and customers in handling statements of account and items paid. The document requires banks to either return the items paid or provide sufficient information in the statement of account for customers to identify the items. If the items are not returned, the person retaining them must maintain the capacity to furnish legible copies for seven years. Customers have the right to request items or legible copies from the bank. The document also emphasizes the customer’s duty to promptly examine 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 allocation of loss between the customer and the bank depends on the customer’s compliance and the bank’s exercise of ordinary care. Additionally, there is a one-year time limit for discovering and reporting unauthorized signatures or alterations. Breach of warranty claims related to unauthorized signatures or alterations may be precluded after this time limit. No specific penalties are mentioned in this document.
Whom does it apply to?
Customers and 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?
No specific penalties are mentioned.
Jurisdiction
Minnesota