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Can you summarize MORS 400.4-406?
Relationship Between Payor Bank and Its Customer > Customer's duty to discover and report unauthorized signature or alteration.
Short Summary
This legal document, part of the Revised Statutes of Missouri, falls under the Uniform Commercial Code and specifically addresses the relationship between a payor bank and its customer regarding bank deposits and collections. The document outlines the duties and responsibilities of both the bank and the customer in relation to the discovery and reporting of unauthorized signatures or alterations on items. The bank is required to provide the customer with a statement of account showing payment of items and either return the items paid or provide sufficient information for the customer to identify the items. The customer must exercise reasonable promptness in examining the statement or items and promptly notify the bank if any unauthorized payment is discovered based on the provided information. 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 in cases where the bank failed to exercise ordinary care or did not pay the item in good faith. Additionally, it sets a one-year time limit for the discovery and reporting of unauthorized signatures or alterations by the customer. Overall, this document establishes the obligations and consequences related to unauthorized signatures or alterations in the banking relationship between customers and banks.
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
Missouri