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Course: Iii Bcom Af Sub Code:: Unit: Session
Course: Iii Bcom Af Sub Code:: Unit: Session
Session : 25
Endorsement
Lecture - Agenda
• Introduction
• Endorsement - Meaning
• Types
• MCQ
• What Next
INTRODUCTION :
Endorsement and delivery is a mode of negotiating
a negotiable instruments like cheque. A negotiable
instrument like cheque payable to order (i.e.,
payable to specified person or his order) can be
negotiated only by endorsement and delivery.
So, it is necessary to have some idea about
endorsement.
Meaning Of Endorsement :
The term “Endorsement” or “indorsement” is
derived from the Latin term “in dorsum” which
means “on the back”. So, endorsement means
signing one’s name on the back of a negotiable
instrument, say, a cheque , with a view to
transferring the interest, right, property or title
in the instrument to anther person.
Parties:
1) Endorser:
The person who endorses the instrument(i.e., the
person who signs his name on the back of the
instrument for the purpose of transferring its
property to another) is called the “endorser”.
2) Endorsee:
The person to whom the instrument is endorsed is
called the
“endorsee”
Effects Of Endorsement:
When a negotiable instrument is endorsed and delivered
by the endorser to the endorsee, he (endorser) creates
certain legal consequences. They are:
1. He transfers his right, interest, property or title in the
instrument to the endorsee.
2. He certifies the genuineness of the instrument.
3. He also certifies that all prior endorsement are genuine.
4. He guarantees to the endorsee that he had good title to the
instrument.
5. Endorsement conveys to the endorsee the right of further
negotiation.
6. He undertakes to compensate every subsequent holder of
the instrument in case of dishonour or non payment of the
instrument which is presented strictly in accordance with its
tenor.
Kinds Of Endorsements:
1. Blank or general endorsement
2. Endorsement in full or special
endorsement
3. Restrictive Endorsement
4. Conditional Endorsement
5. Sans Recourse Endorsement
6. Facultative Endorsement
7. Sans Frais Endorsement
aadiadildm
3.Restrictive endorsement:
An endorsement which, by express words, prohibits the
endorsee from further negotiating the instrument or
restricts the endorsee to deal with his instrument as
directed by the endorser is called ‘restrictive’
endorsement.
The endorsee under a restrictive endorsement gets all the
rights of an endorser except the right of further
negotiation. In other words, such an endorsement
entitles the endorsee to receive the payment on due date
and sue the parties for it but he cannot further negotiate
the instrument.
Mr. Y Only
adildm
4.Conditional endorsement:
(sd.) adildm
adildm
adildm
adildm
MCQ
1.Marking or _____is a method adopted, when the paying banker verifies the customer's
account and indicates thereon that there are enough funds in his account torn that cheque.
(a) Certificate
(b) Amount
(c) Guarantee
(d) None of the above
2. Marking only certifies the genuineness of the drawer's signature and the sufficiency
of funds
(a) Genuineness
(b) Feasibility
(c) Fund
(d) None of the above
3. What happens if a crossed cheque is presented for payment?
a) It can be paid only through a banker
b) It cannot be paid at all
c) It can be paid across the counter in another bank
d) None of the above