§ 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) of this section, 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) of this section, the burden of proving failure to exercise ordinary care is on the person asserting the preclusion. Under subsection (b) of this section, the burden of proving failure to exercise ordinary care is on the person precluded. (Added 1993, No. 158 (Adj. Sess.), § 12, eff. Jan. 1, 1995.)
Structure Vermont Statutes
Title 9A - Uniform Commercial Code
§ 3—104. Negotiable instrument
§ 3—106. Unconditional promise or order
§ 3—107. Instrument payable in foreign money
§ 3—108. Payable on demand or at definite time
§ 3—109. Payable to bearer or to order
§ 3—110. Identification of person to whom instrument is payable
§ 3—114. Contradictory terms of instrument
§ 3—115. Incomplete instrument
§ 3—116. Joint and several liability; contribution
§ 3—117. Other agreements affecting instrument
§ 3—118. Statute of limitations
§ 3—119. Notice of right to defend action
§ 3—202. Negotiation subject to rescission
§ 3—203. Transfer of instrument; rights acquired by transfer
§ 3—205. Special indorsement; blank indorsement; anomalous indorsement
§ 3—206. Restrictive indorsement
§ 3—301. Person entitled to enforce instrument
§ 3—303. Value and consideration
§ 3—305. Defenses and claims in recoupment
§ 3—306. Claims to an instrument
§ 3—307. Notice of breach of fiduciary duty
§ 3—308. Proof of signatures and status as holder in due course
§ 3—309. Enforcement of lost, destroyed, or stolen instrument
§ 3—310. Effect of instrument on obligation for which taken
§ 3—311. Accord and satisfaction by use of instrument
§ 3—312. Lost, destroyed, or stolen cashier’s check, teller’s check, or certified check
§ 3—402. Signature by representative
§ 3—403. Unauthorized signature
§ 3—404. Impostors; fictitious payees
§ 3—405. Employer’s responsibility for fraudulent indorsement by employee
§ 3—406. Negligence contributing to forged signature or alteration of instrument
§ 3—408. Drawee not liable on unaccepted draft
§ 3—409. Acceptance of draft; certified check
§ 3—410. Acceptance varying draft
§ 3—411. Refusal to pay cashier’s checks, teller’s checks, and certified checks
§ 3—412. Obligation of issuer of note or cashier’s check
§ 3—413. Obligation of acceptor
§ 3—415. Obligation of indorser
§ 3—417. Presentment warranties
§ 3—418. Payment or acceptance by mistake
§ 3—419. Instruments signed for accommodation
§ 3—420. Conversion of instrument
§ 3—504. Excused presentment and notice of dishonor
§ 3—601. Discharge and effect of discharge