(1) "Alteration" means:
(a) An unauthorized change in an instrument that purports to modify in any respect the obligation of a party; or
(b) An unauthorized addition of words or numbers or other change to an incomplete instrument relating to the obligation of a party.
(2) Except as provided in subsection (3) of this section, an alteration fraudulently made discharges a party whose obligation is affected by the alteration unless that party assents or is precluded from asserting the alteration. No other alteration discharges a party, and the instrument may be enforced according to its original terms.
(3) A payor bank or drawee paying a fraudulently altered instrument or a person taking it for value, in good faith and without notice of the alteration, may enforce rights with respect to the instrument:
(a) According to its original terms; or
(b) In the case of an incomplete instrument altered by unauthorized completion, according to its terms as completed. Effective: January 1, 1997 History: Repealed and reenacted 1996 Ky. Acts ch. 130, sec. 45, effective January 1, 1997. -- Created 1958 Ky. Acts ch. 77, sec. 3-407, effective July 1, 1960.
Notes of Decisions
Stahl v. St. Elizabeth Med. Ctr., 948 S.W.2d 419 (Ky. Ct. App. 1997).
· cites it 4× “3-601), as discharging a party from liability on an instrument include the fraudulent and material alteration provisions of KRS 355.3-407. Thus, in the case of a- truly fraudulent and material alteration, the obligor (in this case the maker of the note) is discharged from…”
Meshew v. Whitlock, 9 S.W.3d 581 (Ky. Ct. App. 1999).
“As explained by Liebson and Nowka in their treatise on Kentucky’s UCC, the alteration provision in article 8, like the comparable provision in article 3 (KRS 355.3-407), is primarily intended to protect the original contracting parties, not strangers, such as Whitlock, who are…”
— Ky. Rev. Stat. § 355.3-407(1) — 1 case
Stahl v. St. Elizabeth Med. Ctr., 948 S.W.2d 419 (Ky. Ct. App. 1997).
“3-601), as discharging a party from liability on an instrument include the fraudulent and material alteration provisions of KRS 355.3-407. Thus, in the case of a- truly fraudulent and material alteration, the obligor (in this case the maker of the note) is discharged from…”
— Ky. Rev. Stat. § 355.3-407(2)(a) — 1 case
Stahl v. St. Elizabeth Med. Ctr., 948 S.W.2d 419 (Ky. Ct. App. 1997).
“3-601), as discharging a party from liability on an instrument include the fraudulent and material alteration provisions of KRS 355.3-407. Thus, in the case of a- truly fraudulent and material alteration, the obligor (in this case the maker of the note) is discharged from…”
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