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NORTH CAROLINA STATUTES AND CODES

§ 25-3-406. Negligence contributing to forged signature or alteration of instrument.

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§25‑3‑406.  Negligence contributing to forged signature oralteration of instrument.(a)        A person whosefailure to exercise ordinary care substantially contributes to an alteration ofan instrument or to the making of a forged signature on an instrument isprecluded from asserting the alteration or the forgery against a person who, ingood 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 exerciseordinary care in paying or taking the instrument and that failure substantiallycontributes to loss, the loss is allocated between the person precluded and theperson asserting the preclusion according to the extent to which the failure ofeach to exercise ordinary care contributed to the loss.(c)        Under subsection(a) of this section, the burden of proving failure to exercise ordinary care ison the person asserting the preclusion. Under subsection (b) of this section,the burden of proving failure to exercise ordinary care is on the personprecluded. (1965, c. 700, s. 1; 1995, c. 232, s. 1.)
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  • §25‑3‑406.  Negligence contributing to forged signature oralteration of instrument.

    (a)        A person whosefailure to exercise ordinary care substantially contributes to an alteration ofan instrument or to the making of a forged signature on an instrument isprecluded from asserting the alteration or the forgery against a person who, ingood 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 exerciseordinary care in paying or taking the instrument and that failure substantiallycontributes to loss, the loss is allocated between the person precluded and theperson asserting the preclusion according to the extent to which the failure ofeach to exercise ordinary care contributed to the loss.

    (c)        Under subsection(a) of this section, the burden of proving failure to exercise ordinary care ison the person asserting the preclusion. Under subsection (b) of this section,the burden of proving failure to exercise ordinary care is on the personprecluded. (1965, c. 700, s. 1; 1995, c. 232, s. 1.)

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