Clemente Bros. Contracting Corp. v. Hafner-Milazzo

Uniform Commercial Code § 4-406, titled “Customer’s Duty to Discover and Report Unauthorized Signature or Alteration,” sets forth a customer’s and bank’s respective duties concerning a customer’s statement of account. When the bank sends the customer such a statement accompanied by items paid in good faith, the customer must “exercise reasonable care and promptness to examine the statement and items to discover his unauthorized signature . . . and . . . notify the bank promptly after discovery thereof” (UCC 4-406 [1]). If the customer does not comply with that provision he or she is precluded…