§ 34.1-3-406 — Negligence contributing to forged signature or alteration of instrument

(a) 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.
(b) Under subsection (a), 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.
(c) Under subsection (a), the burden of proving failure to
exercise ordinary care is on the person asserting the
preclusion. Under subsection (b), the burden of proving failure
to exercise ordinary care is on the person precluded.