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Can you summarize NDCC Section 41-04-37?
Bank Deposits and Collections > (4-406) Customer's duty to discover and report unauthorized signature or alteration.
Short Summary
This legal document, part of the North Dakota Century Code’s Uniform Commercial Code section on Bank Deposits and Collections, outlines the customer’s duty to discover and report unauthorized signatures or alterations. According to the document, if a bank sends or makes available a statement of account or items to a customer, the customer is required to exercise reasonable promptness in examining the statement or items to determine if any payment was unauthorized due to alteration or unauthorized signature. If the customer should have reasonably discovered the unauthorized payment based on the provided statement or items, they have a duty to promptly notify the bank. Failure to comply with these duties may preclude the customer from asserting against the bank the unauthorized signature or alteration. The document also addresses the allocation of loss between the customer and the bank if the bank failed to exercise ordinary care in paying the item. Additionally, it establishes a one-year time limit for the customer to discover and report unauthorized signatures or alterations, after which they are precluded from asserting such claims against the bank.
Whom does it apply to?
Customers of 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
North Dakota