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Can you summarize MTCO 30-4-406?
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 Montana Code under the Uniform Commercial Code Bank Deposits and Collections, governs the relationship between a payor bank and its customer. It outlines the duties and responsibilities of both parties regarding the handling of items and statements of account. The document specifies that a bank must either return the paid items to the customer or provide sufficient information in the statement of account for the customer to identify the items paid. If the items are not returned, the bank must retain them or maintain the capacity to provide legible copies for 7 years. The customer is required to promptly examine the statement or items and notify the bank of any unauthorized payments due to alterations or unauthorized signatures. 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 based on their respective failure to exercise ordinary care. Additionally, it establishes a one-year time limit for discovering and reporting unauthorized signatures or alterations. Breach of warranty claims and preclusions are also mentioned. No specific penalties are mentioned in this document.
Whom does it apply to?
Customers and banks
What does it govern?
Relationship between Payor Bank and Its Customer
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Montana