Printable Format84-3-407. Alteration. (a) "Alteration" means (1) an unauthorized change in an instrument that purports to modify in any respect the obligation of a party, or (2) an unauthorized addition of words or numbers or other change to an incomplete instrument relating to the obligation of a party.
(b) Except as provided in subsection (c), an alteration fraudulently made discharges a party whose obligation is affected by the alteration unless that party assents or is precluded from asserting the alteration. No other alteration discharges a party, and the instrument may be enforced according to its original terms.
(c) A payor bank or drawee paying a fraudulently altered instrument or a person taking it for value, in good faith and without notice of the alteration, may enforce rights with respect to the instrument (1) according to its original terms, or (2) in the case of an incomplete instrument altered by unauthorized completion, according to its terms as completed.
History: L. 1991, ch. 296, § 44; February 1, 1992.
KANSAS COMMENT, 1996
This section is identical to the 1995 Official Text except that the lower case roman numerals have been replaced by arabic numerals. This section is derived from the former 84-3-407 with several minor changes. Historical case and statutory references can be obtained from the 1965 and 1983 bound volume 7 of the Kansas Statutes Annotated.
To be an alteration, subsection (a) requires that the modification change the rights of a party or be an unauthorized addition to the instrument. Subsection (b) discharges any party whose contract is changed by the alteration, if the alteration is fraudulently made. Thus spoliation or other changes made without fraudulent intent do not result in a discharge, and the instrument is enforcible according to its original terms.
Where there is a discharge, however, it is a personal defense. A drawee or payor bank, or a transferee taking it for value, in good faith and without notice of the alteration will be able to enforce it according to its original terms. If an incomplete instrument is completed without authorization, it can be enforced as completed.
Note that the warranty provisions, 84-3-416 and 84-3-417 and 84-4-207 and 84-4-208, will usually provide a claim for those who have suffered loss as a result of the modification, so that the loss can be traced back to the wrongdoer.
Revisor's Note:
Former section 84-3-407 was repealed by L. 1991, ch. 296, § 111 and the number reassigned to the current text.