Ask Reggi Your Question Now
Can you summarize Tex. Bus. & Com. Section 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 governs the duty of customers to discover and report unauthorized signatures or alterations in their bank statements. According to the document, banks are required to either return or provide sufficient information about the items paid in the customer’s statement of account. If the items are not returned, the bank must provide a telephone number for the customer to request the items or copies. The customer is expected to promptly examine the statement or items and notify the bank if any unauthorized payment is discovered. Failure to comply with this duty may preclude the customer from asserting unauthorized signatures or alterations against the bank. However, if the bank failed to exercise ordinary care in paying the item and the failure contributed to the loss, the loss is allocated between the customer and the bank. Additionally, if the customer does not discover and report unauthorized signatures or alterations within one year, they are precluded from asserting them against the bank. The document does not mention any specific penalties or exemptions.
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 penalties are mentioned.
Jurisdiction
Texas