Indorsements

Negotiable Instruments

Endorsement (Indorsement)
An endorsement on a negotiable instrument, such as a check or bill or a promissory note, has the effect of transferring rights represented by the instrument to another individual (eg).

Ways of sign I -The manner in which an individual endorses a check is by placing his or her signature on the back of it, but it is valid even if the signature is placed somewhere else, such as on a separate paper, known as an allonge, which provides a space for a signature/ Stamped paper
ESSENTIALS FOR VALID ENDORSEMENT Indorsement is complete only when : 1. The holder signs on the face/back of the instrument or on a separate slip of paper, or on a stamped paper. 2. The Instrument is delivered to the indorsee. 3. The Instrument is indorsed and delivered with an intention to transfer rights/property..

Slip may be signed( Indorsed) by Owner of slip ( I) Indorsee () Joint Owners and Indorsees Partner(s) of the firm may do so (on behalf of firm) Types of IndorsementsBLANK I It is an endorsement consisting of nothing but a signature and allowing any party in possession of the endorsed item to execute a claim. Becomes Bearers cheque. FULL I I write my name and recipients name.

PARTIAL I = Half the amount still has to be paid to owner. 2 cases Valid Half has already been paid by.+ Has been noted on the slip. I can ask for the rest later. (.owes me 1000. He has paid 500, noted. I can ask for rest). Invalid ..owes me 1000. . Signs bill as Pay her 500. This is a Partial I and Invalid

Sans Recourse I I include words wherein Im not liable to compensate..incase cheque is dishonored.

Pay,without recourse to me My sign Conditional I Inorder for ..to receive payment, he has to fulfill certain conditions. Pay 5000 on arrival of luggage at Santacruz airport by 24 Jan,2013. My sign.

Restrictive I I word it so that no further negotiation is possible. Pay.only My sign. Facultative I I abandon my right / increase my liability. Pay., notice of dishonor waived.
Forged I Nullified as not the sign of the owner.