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HARRY HUGHES, Governor
3709
Article - Commercial Law
Section 4-406
Annotated Code of Maryland
(1975 Volume and 1981 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That section(s) of the Annotated Code of Maryland
read(s) as follows:
Article - Commercial Law
4-406.
(1) [When] IF a bank sends to its customer a statement
of account accompanied by items paid in good faith in
support of the debit entries [or holds the statement and
items pursuant to a request or instructions of its customer
or otherwise in a reasonable manner makes the statement and
items available to the customer], the customer must exercise
reasonable care and promptness to examine the statement and
items to discover [his] AN unauthorized signature or any
alteration on an item and must notify the bank promptly
after discovery thereof.
(2) If the bank establishes that the customer failed
with respect to an item to comply with the duties imposed on
the customer by subsection (1) the customer is precluded
from asserting against the bank
(a) [His] THE unauthorized signature OF THE
CUSTOMER or any alteration on the item if the bank also
establishes that it suffered a loss by reason of such
failure; and
(b) An unauthorized signature or alteration by
the same wrongdoer on any other item paid in good faith by
the bank after the first item and statement was available to
the customer for a reasonable period not exceeding [fourteen
calendar] 10 14 BUSINESS days and before the bank receives
notification from the customer of any such unauthorized
signature or alteration.
(3) The preclusion under subsection (2) does not apply
if the customer establishes lack of ordinary care on the
part of the bank in paying the item.
(4) Without regard to care or lack of care of either
the customer or the bank, a customer who does not within
[one year] 12 MONTHS from the time the statement and items
are made available to the customer (subsection (1)) discover
and report [his] AN unauthorized signature or any alteration
on the face or back of the item or does not within [three
years] 36 MONTHS from that time discover and report any
unauthorized indorsement is precluded from asserting against
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