Ohio Revised Code

Ohio Rev. Code § 1303.49 (2026)

Negligence contributing to forged signature or alteration of instrument - UCC 3-406

✓ current as of May 2026
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(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 division (A) of this section, 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 under division (A) of this section from asserting an alteration or forgery 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 division (A) of this section, the burden of proving that a failure to exercise ordinary care contributed to an alteration of an instrument or to the making of a forged signature on an instrument is on the person asserting the preclusion. Under division (B) of this section, the burden of proving that a failure to exercise ordinary care in paying or taking an instrument substantially contributed to loss is on the person precluded.

Notes of Decisions
Cited in 14 cases, 1976–2018 · leading case: Cont'l Cas. Co. v. Fifth/Third Bank, 418 F. Supp. 2d 964 (N.D. Ohio 2006).
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Cont'l Cas. Co. v. Fifth/Third Bank, 418 F. Supp. 2d 964 (N.D. Ohio 2006). · cites it 11× “47) (employee dishonesty); 3-406 (O.R.C. § 1303.49) (negligence substantially contributing to the making of a forgery).”
Glimcher v. Reinhorn, 587 N.E.2d 462 (Ohio Ct. App. 1991). “Our review of the notes at issue indicates that they fall within the requirements imposed for the existence of a negotiable instrument.”
Am. Sec. Ins. Serv. v. Damiani (In Re Damiani), 157 B.R. 17 (Bankr. N.D. Ohio 1993). · cites it 3× “financial condition; (B) use of a statement in writing— (i) that is materially false; (ii) respecting the debtor’s or an insider’s financial condition; (iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and…”
Huron Cnty. Banking Co., N.A. v. Knallay, 489 N.E.2d 1049 (Ohio Ct. App. 1984). “Although appellant’s signature does, in fact, appear on the instrument, the question which remains concerns the extent of appellant’s liability- A “maker” engages that he will pay the instrument according to its tenor (R.C. 1303.49), while an “in-dorser” engages that he will pay…”
Dryden v. Dryden, 621 N.E.2d 1216 (Ohio Ct. App. 1993). “Pursuant to R.C. 1303.49(A), the maker of a note engages that he will pay the instrument according to its tenor at the time of his engagement.”
Banco Ganadero y Agricola, S.A. v. Soc'y Nat'l Bank of Cleveland, 418 F. Supp. 520 (N.D. Ohio 1976). · cites it 2× “Under Ohio Rev.Code § 1303.49 (U.C.C. § 3-413) the contracts of a maker (of a note) and acceptor (of a draft) are identical: Each engages that he will “pay the instrument according to its tenor at the time of his engagement or as completed .”
Banco Ganadero Y Agricola, Etc. v. Soc. Nat. Bk., Cleve., 418 F. Supp. 520 (N.D. Ohio 1976). · cites it 2× “Under Ohio Rev.Code § 1303.49 (U.C.C. § 3413) the contracts of a maker (of a note) and acceptor (of a draft) are identical: Each engages that he will "pay the instrument according to its tenor at the time of his engagement or as completed .”
Belfance v. Huntington Nat'l Bank (In Re World Metal, Inc.), 313 B.R. 720 (Bankr. N.D. Ohio 2004). · cites it 3× “At least two defenses may be asserted against a claim of conversion of a negotiable instrument: (1) if the payee of the instrument is an employer and the forgery was accomplished by an employee entrusted by the payee with responsibility for the instrument and (2) if the forgery…”
Mueller v. Miller, 834 N.E.2d 862 (Ohio Ct. App. 2005). · cites it 3× “In its motion for summary judgment, Fifth Third cited relevant portions of the Uniform Commercial Code, Sections 3-406 and 4-406, codified as R.C. 1303.49 and R.C. 1304.35, respectively, in support of its contention that it was entitled to judgment as a matter of law.”
Chesler v. Dollar Bank, Fed. Sav. Bank, 951 N.E.2d 1098 (Ohio Ct. App. 2011). · cites it 4× “{¶ 34} In this assignment of error, the bank contends that the trial court ignored plaintiffs statutory duty to prevent a forgery from occurring under R.C. 1303.49 and erred in failing to find that plaintiffs conduct substantially contributed to the forgeries.”
Apollo Sav. & Loan Co. v. Star Bank, N.A., 630 N.E.2d 13 (Ohio Ct. App. 1993). · cites it 10× “1980) 501-503, Section 13-9 (explaining UCC 3-413[2] and 3-502, the analogs to R.C. 1303.49[B] and 1303.57[A][2]). In the first assignment of error, appellant argues that its duty to pay on a drawer’s contract is preempted by the Expedited Funds Availability Act (“EFAA”).”
Ludwig v. Fifth Third Bank, 908 N.E.2d 992 (Ohio Ct. App. 2009). · cites it 4× “{¶ 14} But Fifth Third argues that under R.C. 1303.49, Ludwig’s own negligence defeated his claim.”
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— Ohio Rev. Code § 1303.49(A) — 6 cases
Glimcher v. Reinhorn, 587 N.E.2d 462 (Ohio Ct. App. 1991). “Our review of the notes at issue indicates that they fall within the requirements imposed for the existence of a negotiable instrument.”
Dryden v. Dryden, 621 N.E.2d 1216 (Ohio Ct. App. 1993). “Pursuant to R.C. 1303.49(A), the maker of a note engages that he will pay the instrument according to its tenor at the time of his engagement.”
Am. Sec. Ins. Serv. v. Damiani (In Re Damiani), 157 B.R. 17 (Bankr. N.D. Ohio 1993). “financial condition; (B) use of a statement in writing— (i) that is materially false; (ii) respecting the debtor’s or an insider’s financial condition; (iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and…”
Chesler v. Dollar Bank, Fed. Sav. Bank, 951 N.E.2d 1098 (Ohio Ct. App. 2011). “{¶ 34} In this assignment of error, the bank contends that the trial court ignored plaintiffs statutory duty to prevent a forgery from occurring under R.C. 1303.49 and erred in failing to find that plaintiffs conduct substantially contributed to the forgeries.”
Beau Townsend Ford Lincoln v. Don Hinds Ford (6th Cir. 2018).
— Ohio Rev. Code § 1303.49(B) — 3 cases
Cont'l Cas. Co. v. Fifth/Third Bank, 418 F. Supp. 2d 964 (N.D. Ohio 2006). “47) (employee dishonesty); 3-406 (O.R.C. § 1303.49) (negligence substantially contributing to the making of a forgery).”
Nicola v. Burnette, 499 N.E.2d 368 (Ohio Ct. App. 1985).
Apollo Sav. & Loan Co. v. Star Bank, N.A., 630 N.E.2d 13 (Ohio Ct. App. 1993). “1980) 501-503, Section 13-9 (explaining UCC 3-413[2] and 3-502, the analogs to R.C. 1303.49[B] and 1303.57[A][2]). In the first assignment of error, appellant argues that its duty to pay on a drawer’s contract is preempted by the Expedited Funds Availability Act (“EFAA”).”
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