Illinois Compiled Statutes
810 ILCS 5/3-406 (2026)
Negligence contributing to forged signature or alteration of instrument
✓ current as of May 2026
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(810 ILCS 5/3-406)
(from Ch. 26, par. 3-406)
Sec. 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: P.A. 87-582; 87-1135.)
Notes of Decisions
Cited in 4
cases, 1999–2005 · leading case: Dr. Linda A. Rodrigue v. Olin Employees Credit Union, Cross-Appellee, 406 F.3d 434 (7th Cir. 2005).
Dr. Linda A. Rodrigue v. Olin Employees Credit Union, Cross-Appellee, 406 F.3d 434 (7th Cir. 2005). “Comparative Fault As we noted previously in summarizing the district court’s findings, the court rejected the notion that the “faithless employee” defense embodied in 810 ILCS 5/3-405(b) shielded Olin from liability altogether, and it likewise rejected Olin’s contention that…”
Rodrigue, Linda v. Olin Employees (7th Cir. 2005). “Third, the court rejected the notion that Rodrigue’s own failure to exercise ordinary care had substantially contrib- uted to the fraudulent endorsement of the checks and that, consequently, she could not recover from Olin pursuant to 810 ILCS 5/3-406(a). The court found that…”
1st Nat'l Bk. v. MidAmerica Fed. Sav. Bk. (Ill. App. Ct. 1999). “MidAmerica further argues that it has a defense under section 3-406 of the UCC (810 ILCS 5/3-406 (West 1996)) because First Chicago's failure to exercise ordinary care substantially contributed to the making of the forged signature on the check.”
Clean World Eng'g, LTD. v. MidAmerica Bank (Ill. App. Ct. 2003). “" 810 ILCS 5/3-406 (West 2000). In Chicago Heights Currency Exchange, Inc.”
— 810 ILCS 5/3-406(a) — 2 cases
Dr. Linda A. Rodrigue v. Olin Employees Credit Union, Cross-Appellee, 406 F.3d 434 (7th Cir. 2005). “Comparative Fault As we noted previously in summarizing the district court’s findings, the court rejected the notion that the “faithless employee” defense embodied in 810 ILCS 5/3-405(b) shielded Olin from liability altogether, and it likewise rejected Olin’s contention that…”
Rodrigue, Linda v. Olin Employees (7th Cir. 2005). “Third, the court rejected the notion that Rodrigue’s own failure to exercise ordinary care had substantially contrib- uted to the fraudulent endorsement of the checks and that, consequently, she could not recover from Olin pursuant to 810 ILCS 5/3-406(a). The court found that…”
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