State of Illinois
92nd General Assembly

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 1        AN ACT to amend the Uniform Commercial Code.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.   The  Uniform  Commercial Code is amended by
 5    changing Section 3-407 as follows:

 6        (810 ILCS 5/3-407) (from Ch. 26, par. 3-407)
 7        Sec. 3-407. Alteration.
 8        (a)  "Alteration" means (i) an unauthorized change in  an
 9    instrument  that  purports  to  modify  in  any  respect  the
10    obligation  of  a  party, or (ii) an unauthorized addition of
11    words or numbers or other change to an incomplete  instrument
12    relating  to  the  obligation  of  a  party. The unauthorized
13    addition of words or numbers is not limited to  changes  made
14    electronically or by encoder.
15        (b)  Except  as provided in subsection (c), an alteration
16    fraudulently made discharges  a  party  whose  obligation  is
17    affected  by  the  alteration unless that party assents or is
18    precluded from asserting the alteration.  No other alteration
19    discharges a  party,  and  the  instrument  may  be  enforced
20    according to its original terms.
21        (c)  A payor bank or drawee paying a fraudulently altered
22    instrument or a person taking it for value, in good faith and
23    without  notice  of  the  alteration, may enforce rights with
24    respect to the  instrument  (i)  according  to  its  original
25    terms,  or  (ii)  in  the  case  of  an incomplete instrument
26    altered by unauthorized completion, according to its terms as
27    completed.
28    (Source: P.A. 87-582; 87-1135.)

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