BANK-STATEMENT RULE

bank-statement rule.Commercial law. The principle that if a bank customer fails to examine a bank statement and any items returned with it, and report to the bank within a reasonable time any unauthorized payments because of a material alteration or forgery, the customer may be precluded from complaining about the alteration or forgery. UCC § 4-406. [Cases: Banks and Banking

148(3, 4), 174. C.J.S. Banks and Banking §§ 416, 419, 421–428, 430–432, 434–438.][Blacks Law 8th]