57A-3-406. Negligence contributing to forged signature or alteration of instrument.
(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.
Source: SL 1994, ch 367, ยง3-406.
Structure South Dakota Codified Laws
Title 57A - Uniform Commercial Code
Chapter 03 - Negotiable Instruments
Section 57A-3-101 - Short title.
Section 57A-3-102 - Subject matter.
Section 57A-3-103 - Definitions.
Section 57A-3-104 - Negotiable instrument.
Section 57A-3-105 - Issue of instrument.
Section 57A-3-106 - Unconditional promise or order.
Section 57A-3-107 - Instrument payable in foreign money.
Section 57A-3-108 - Payable on demand or at definite time.
Section 57A-3-109 - Payable to bearer or to order.
Section 57A-3-110 - Identification of person to whom instrument is payable.
Section 57A-3-111 - Place of payment.
Section 57A-3-113 - Date of instrument.
Section 57A-3-114 - Contradictory terms of instrument.
Section 57A-3-115 - Incomplete instrument.
Section 57A-3-116 - Joint and several liability--Contribution.
Section 57A-3-117 - Other agreements affecting instrument.
Section 57A-3-118 - Statute of limitations.
Section 57A-3-119 - Notice of right to defend action.
Section 57A-3-201 - Negotiation.
Section 57A-3-202 - Negotiation subject to rescission.
Section 57A-3-203 - Transfer of instrument--Rights acquired by transfer.
Section 57A-3-204 - Indorsement.
Section 57A-3-205 - Special indorsement--Blank indorsement--Anomalous indorsement.
Section 57A-3-206 - Restrictive indorsement.
Section 57A-3-207 - Reacquisition.
Section 57A-3-301 - Person entitled to enforce instrument.
Section 57A-3-302 - Holder in due course.
Section 57A-3-303 - Value and consideration.
Section 57A-3-304 - Overdue instrument.
Section 57A-3-305 - Defenses and claims in recoupment.
Section 57A-3-306 - Claims to an instrument.
Section 57A-3-307 - Notice of breach of fiduciary duty.
Section 57A-3-308 - Proof of signatures and status as holder in due course.
Section 57A-3-309 - Enforcement of lost, destroyed, or stolen instrument.
Section 57A-3-310 - Effect of instrument on obligation for which taken.
Section 57A-3-311 - Accord and satisfaction by use of instrument.
Section 57A-3-312 - Lost, destroyed, or stolen cashier's check, teller's check or certified check.
Section 57A-3-401 - Signature.
Section 57A-3-402 - Signature by representative.
Section 57A-3-403 - Unauthorized signature.
Section 57A-3-404 - Impostors--Fictitious payees.
Section 57A-3-405 - Employer's responsibility for fraudulent indorsement by employee.
Section 57A-3-406 - Negligence contributing to forged signature or alteration of instrument.
Section 57A-3-407 - Alteration.
Section 57A-3-408 - Drawee not liable on unaccepted draft.
Section 57A-3-409 - Acceptance of draft--Certified check.
Section 57A-3-410 - Acceptance varying draft.
Section 57A-3-411 - Refusal to pay cashier's checks, teller's checks, and certified checks.
Section 57A-3-412 - Obligation of issuer of note or cashier's check.
Section 57A-3-413 - Obligation of acceptor.
Section 57A-3-414 - Obligation of drawer.
Section 57A-3-415 - Obligation of indorser.
Section 57A-3-416 - Transfer warranties.
Section 57A-3-417 - Presentment warranties.
Section 57A-3-418 - Payment or acceptance by mistake.
Section 57A-3-419 - Instruments signed for accommodation.
Section 57A-3-420 - Conversion of instrument.
Section 57A-3-421 - Collection costs and expenses--Liability of issuer of dishonored check.
Section 57A-3-501 - Presentment.
Section 57A-3-503 - Notice of dishonor.
Section 57A-3-504 - Excused presentment and notice of dishonor.
Section 57A-3-505 - Evidence of dishonor.
Section 57A-3-601 - Discharge and effect of discharge.
Section 57A-3-603 - Tender of payment.
Section 57A-3-604 - Discharge by cancellation or renunciation.
Section 57A-3-605 - Discharge of indorsers and accommodation parties.