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Can you summarize SCCL 36-4-406?
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 South Carolina Code of Laws, specifically the Commercial Code - Bank Deposits and Collections, outlines the duty of customers 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 must exercise reasonable promptness in examining the statement or items to determine if any payment was unauthorized due to an alteration or unauthorized signature. If the customer should have reasonably discovered the unauthorized payment based on the provided statement or items, they must 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 states that if the customer does not discover and report the unauthorized signature or alteration within one year, they are precluded from asserting it against the bank. No specific penalties are mentioned in this document.
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
South Carolina