Indiana Code
Chapter 3.1. Negotiable Instruments
26-1-3.1-406. Negligence Contributing to Forged Signature or Alteration of Instrument

Sec. 406. (a) A person whose failure to exercise ordinary care substantially contributes to an alteration of an instrument or to the making of a forged signature on an instrument is precluded from asserting the alteration or the forgery against a person who, in good faith, pays the instrument or takes it for value or for collection.
(b) Under subsection (a), if the person asserting the preclusion fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to loss, the loss is allocated between the person precluded and the person asserting the preclusion according to the extent to which the failure of each to exercise ordinary care contributed to the loss.
(c) Under subsection (a), the burden of proving failure to exercise ordinary care is on the person asserting the preclusion. Under subsection (b), the burden of proving failure to exercise ordinary care is on the person precluded.
As added by P.L.222-1993, SEC.5.

Structure Indiana Code

Indiana Code

Title 26. Commercial Law

Article 1. Uniform Commercial Code

Chapter 3.1. Negotiable Instruments

26-1-3.1-101. Short Title

26-1-3.1-102. Subject Matter

26-1-3.1-103. Definitions

26-1-3.1-104. Negotiable Instrument

26-1-3.1-105. Issue of Instrument

26-1-3.1-106. Unconditional Promise or Order

26-1-3.1-107. Instrument Payable in Foreign Money

26-1-3.1-108. Payable on Demand or at Definite Time

26-1-3.1-109. Payable to Bearer or to Order

26-1-3.1-110. Identification of Person to Whom Instrument Is Payable

26-1-3.1-111. Place of Payment

26-1-3.1-112. Interest

26-1-3.1-113. Date of Instrument

26-1-3.1-114. Contradictory Terms of Instrument

26-1-3.1-115. Incomplete Instrument

26-1-3.1-116. Joint and Several Liability; Contribution

26-1-3.1-117. Other Agreements Affecting Instrument

26-1-3.1-118. Statute of Limitations

26-1-3.1-119. Notice of Right to Defend Action

26-1-3.1-201. Negotiation

26-1-3.1-202. Negotiation Subject to Rescission

26-1-3.1-203. Transfer of Instrument; Rights Acquired by Transfer

26-1-3.1-204. Endorsement

26-1-3.1-205. Special Endorsement; Blank Endorsement; Anomalous Endorsement

26-1-3.1-206. Restrictive Endorsement

26-1-3.1-207. Reacquisition

26-1-3.1-301. Person Entitled to Enforce Instrument

26-1-3.1-302. Holder in Due Course

26-1-3.1-303. Value and Consideration

26-1-3.1-304. Overdue Instrument

26-1-3.1-305. Defenses and Claims in Recoupment

26-1-3.1-306. Claims to an Instrument

26-1-3.1-307. Notice of Breach of Fiduciary Duty

26-1-3.1-308. Proof of Signatures and Status as Holder in Due Course

26-1-3.1-309. Enforcement of Lost, Destroyed, or Stolen Instrument

26-1-3.1-310. Effect of Instrument on Obligation for Which Taken

26-1-3.1-311. Accord and Satisfaction by Use of Instrument

26-1-3.1-312. Lost Check; Assertion of Claim to Obligated Bank

26-1-3.1-401. Signature

26-1-3.1-402. Signature by Representative

26-1-3.1-403. Unauthorized Signature

26-1-3.1-404. Impostors; Fictitious Payees

26-1-3.1-405. Employer's Responsibility for Fraudulent Endorsement by Employee

26-1-3.1-406. Negligence Contributing to Forged Signature or Alteration of Instrument

26-1-3.1-407. Alteration

26-1-3.1-408. Drawee Not Liable on Unaccepted Draft

26-1-3.1-409. Acceptance of Draft; Certified Check

26-1-3.1-410. Acceptance Varying Draft

26-1-3.1-411. Refusal to Pay Cashier's Checks, Teller's Checks, and Certified Checks

26-1-3.1-412. Obligation of Issuer of Note or Cashier's Check

26-1-3.1-413. Obligation of Acceptor

26-1-3.1-414. Obligation of Drawer

26-1-3.1-415. Obligation of Endorser

26-1-3.1-416. Transfer Warranties

26-1-3.1-417. Presentment Warranties

26-1-3.1-418. Payment or Acceptance by Mistake

26-1-3.1-419. Instruments Signed for Accommodation

26-1-3.1-420. Conversion of Instrument

26-1-3.1-501. Presentment

26-1-3.1-502. Dishonor

26-1-3.1-502.5. Surcharge After Dishonor

26-1-3.1-503. Notice of Dishonor

26-1-3.1-504. Excused Presentment and Notice of Dishonor

26-1-3.1-505. Evidence of Dishonor

26-1-3.1-601. Discharge and Effect of Discharge

26-1-3.1-602. Payment

26-1-3.1-603. Tender of Payment

26-1-3.1-604. Discharge by Cancellation or Renunciation

26-1-3.1-605. Release or Extension of an Obligor's Obligation