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.
Notes of Decisions
Schoenfelder v. Arizona Bank, 796 P.2d 881 (Ariz. 1990).
· cites it 8× “First, the Bank argued that it had a defense under A.R.S. § 47-3406, which provides: Any person who by his negligence substantially contributes to a material alteration of the instrument or to the making of an unauthorized signature is precluded from asserting the alteration or…”
City of Phoenix v. Great W. Bank & Trust, 712 P.2d 966 (Ariz. Ct. App. 1985).
· cites it 2× “Unlike §§ 47-3406 and 47-4406, § 47-3405 contains no explicit requirement of “ordinary care” or “reasonable commercial standards.”
Green Valley Villas West Condo. Ass'n v. Washington Fed. Bank (D. Ariz. 2024).
· cites it 4× “) 4 The remainder of the Reply focuses on Wells Fargo's argument that § 47-3406 5 does not provide an affirmative claim but is rather a contributory negligence provision 6 applicable only where a defendant asserts that the issuer of a check also failed to exercise 7 ordinary…”
— Ariz. Rev. Stat. § 47-3406(A) — 1 case
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