GA Code § 11-3-406 (2021)
2021 Georgia Code|Title 11 - Commercial Code|Article 3 - Negotiable Instruments|Part 4 - Liability of Parties|§ 11-3-406. Negligence Contributing to Forged Signature or Alteration of Instrument

  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.   Under subsection (a) of this Code 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 and the person asserting the preclusion according to the extent to which the failure of each to exercise ordinary care contributed to the loss.   Under subsection (a) of this Code section, the burden of proving failure to exercise ordinary care is on the person asserting the preclusion. Under subsection (b) of this Code section, the burden of proving failure to exercise ordinary care is on the person precluded.     (Code 1981, §11-3-406, enacted by Ga. L. 1996, p. 1306, § 3.)   RESEARCH REFERENCES   Am. Jur. 2d.   - 4 Am. Jur. 2d, Alteration of Instruments, § 63. 10 Am. Jur. 2d, Banks, § 747. 11 Am. Jur. 2d, Bills and Notes, §§ 120, 121. 11 Am. Jur. 2d, Banks and Financial Institutions, §§ 913, 918. 12 Am. Jur., 2d, Bills and Notes, §§ 553, 604, 605.   Commercial Paper - Negligence Contributing to Alteration or Unauthorized Signature Under UCC § 3-406, 14 POF2d 693.   C.J.S.   - 3A C.J.S., Alteration of Instruments, § 17. 10 C.J.S., Bills and Notes, §§ 190, 191.   U.L.A.   - Uniform Commercial Code (U.L.A.) § 3-406.   ALR.    - Liability of party to commercial paper so drawn as to be easily alterable as to amount, 22 A.L.R. 1139; 36 A.L.R. 327; 39 A.L.R. 1380.    Misnomer or abbreviation of name of intended payee as affecting liability where check is paid or purchased upon forged indorsement, 29 A.L.R. 368.    Alteration of note before delivery to payee as affecting parties who do not personally consent, 44 A.L.R. 1244.    Alteration of instrument by agent as binding on principal, 51 A.L.R. 1229.    Construction of savings bank by-law expressly assented to by depositor, relieving bank from liability for payment to unauthorized person, 52 A.L.R. 760.    Who must bear loss as between drawer induced by fraud of employee or agent to issue check payable to nonexisting person or a person having no interest in the proceeds thereof, and one who cashes or pays it on the forged indorsement by such employee or agent of the name of such ostensible payee, 99 A.L.R. 439.    Deception as to character of paper signed as defense as against bona fide holder of negotiable paper, 160 A.L.R. 1295.   When depositor-drawer of check is "precluded," under Negotiable Instruments Law, § 23, from setting up forgery of indorsement or want of authority against drawee bank, 39 A.L.R.2d 641.   Rights and liabilities of drawee bank, as to persons other than drawer, with respect to uncertified paid check which was altered, 75 A.L.R.2d 611.   Commercial paper: what amounts to "negligence contributing to alteration or unauthorized signature" under UCC § 3-406, 67 A.L.R.3d 144.   Liability of bank for diversion to benefit of presenter or third party of proceeds of check drawn to bank's order by drawer not indebted to bank, 69 A.L.R.4th 778.