Asked by Niketa Kurjee on Jul 05, 2024
Verified
A customer's negligence cannot shift the loss when payment is made on a check with an altered amount.
Altered Amount
A value or figure that has been modified or changed, usually in the context of financial transactions, documents, or reports, to differ from its original state.
Customer's Negligence
The failure of a customer to exercise reasonable care, leading to loss or damage.
- Identify the opportunities for banks and clients to mutually agree upon the distribution of forgery risks through contracts.
- Understand the legal obligations of banks when encountering forged drawer signatures.
Verified Answer
ZK
Zybrea KnightJul 06, 2024
Final Answer :
False
Explanation :
Under the Uniform Commercial Code (UCC), if a customer's negligence substantially contributes to the alteration of a check (e.g., leaving blank spaces on checks, not using secure check stock, etc.), the customer may bear the loss or share in the loss with the bank, depending on the circumstances and the degree of negligence.
Learning Objectives
- Identify the opportunities for banks and clients to mutually agree upon the distribution of forgery risks through contracts.
- Understand the legal obligations of banks when encountering forged drawer signatures.