Comparative Negligence Under the Code: Protecting Negligent Banks Against Negligent Customers

This Article will examine modern banking practices with respect to processing checks and the effect of technology on liability for forged or altered checks. Part I describes the magnetic ink character-recognition system. Part II discusses check truncation. Part III recounts the evolution of contract and tort theories of liability from traditional to modern bank practices. Part IV analyzes the new comparative negligence provisions. Part V investigates the standards of ordinary care. Part VI evaluates the respective duties of the banks and their customers in light of the provisions that reflect the banking industry’s transformation from the Paper Age to the Electronic Era. Recognizing that the nationwide enactment of revised Articles Three and Four is inevitable, the final Part of this Article discusses the need for and concludes with recommendations for consumer legislation to protect consumers of banking services.