Montana Code 30-3-406. Negligence contributing to forged signature or alteration of instrument
30-3-406. Negligence contributing to forged signature or alteration of instrument. (1) 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.
Terms Used In Montana Code 30-3-406
- Forgery: The fraudulent signing or alteration of another's name to an instrument such as a deed, mortgage, or check. The intent of the forgery is to deceive or defraud. Source: OCC
- Good faith: means honesty in fact and the observance of reasonable commercial standards of fair dealing. See Montana Code 30-3-102
- Person: includes a corporation or other entity as well as a natural person. See Montana Code 1-1-201
(2)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.
(3)Under subsection (1), the burden of proving failure to exercise ordinary care is on the person asserting the preclusion. Under subsection (2), the burden of proving failure to exercise ordinary care is on the person precluded.