Com. Code, § 3406 · Chapter 4. Liability of Parties

Com. Code, § 3406

Verbatim from the official edition

Text — As published in the Legislative Counsel's database, tables dated October 18, 2026 (pubinfo_2025.zip)

(a) A person whose failure to exercise ordinary care 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 subdivision (a), if the person asserting the preclusion fails to exercise ordinary care in paying or taking the instrument and that failure 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 subdivision (a), the burden of proving failure to exercise ordinary care is on the person asserting the preclusion. Under subdivision (b), the burden of proving failure to exercise ordinary care is on the person precluded.

Notes and commentary — not statutory text

History

Repealed and added by Stats. 1992, Ch. 914, Sec. 6. Effective January 1, 1993.

Source of truth

Edition: As published in the Legislative Counsel's database, tables dated October 18, 2026 (pubinfo_2025.zip)
Official file: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=COM&sectionNum=3406.
Text hash: sha256 5e6197c56435862a785d1b0209b19c773e4e51463ade5c579cfffc33123b3267
Composed by: compose_ca.py 2026-10-22: the Legislative Counsel's CAML content files read by a tokenizer (caml_readers.reader_a); an independent xml.etree reading (caml_readers.reader_b) agrees on every section

Cited by 2 provisions

Provisions in this library whose text cites Com. Code, § 3406. Each shows the citation as that text prints it.

Commercial Code

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