Indorsee: An individual who is given a piece of paper by someone else, with their name written on it, which can be exchanged for money or goods. If the indorsee receives the paper without knowing its lack of value, they can utilise it to obtain money or goods.
An indorsee, also known as an endorsee, is an individual or entity that receives a negotiable instrument by means of endorsement. This implies that the original payee or holder has signed over the instrument, such as a check or promissory note, to the indorsee. The indorsee can be any legally authorized recipient and holder of a negotiable instrument, including individuals, businesses, or financial institutions. Among the various types of indorsees, one significant category is the “indorsee in due course.” This term refers to an indorsee who acquires a negotiable instrument in good faith, for value, and without any knowledge of defects or issues associated with the instrument. For instance, if an individual receives a check from a friend and subsequently endorses it to their bank, the bank becomes the indorsee. If the bank received the check in good faith, prior to its maturity date, and without any awareness of any problems with the check, it would be considered an indorsee in due course. Another example could involve a business receiving a promissory note from a customer and endorsing it to a factoring company. In this scenario, the factoring company becomes the indorsee and can collect payment from the customer when the note reaches maturity. If the factoring company acquired the note in good faith, for value, and without any knowledge of any issues with the note, it would be considered an indorsee in due course. These examples demonstrate that an indorsee is an individual or entity that receives a negotiable instrument through endorsement, while an indorsee in due course is someone who acquires the instrument in good faith, for value, and without any knowledge of defects or issues.
An indorsee refers to a person or entity who receives a negotiable instrument, such as a check or promissory note, through an endorsement.
As an indorsee, you become the legal holder of the negotiable instrument and have the right to enforce its payment or transfer it to another party.
Yes, an indorsee can transfer their rights to another person through a further endorsement, thereby making the new person the indorsee.
An indorsee can make a blank endorsement, special endorsement, restrictive endorsement, or qualified endorsement, depending on their intentions and requirements.
Yes, as an indorsee, you can be held liable for the payment of the negotiable instrument if the previous parties in the chain of endorsements default on their obligations.
If the indorser’s signature is forged, the indorsee may not be held liable for the payment of the negotiable instrument. However, they should promptly notify the relevant authorities and parties involved.
Yes, an indorsee has the right to refuse to accept a negotiable instrument if they have valid reasons, such as suspicion of fraud or insufficient funds.
Yes, an indorsee can sue the previous parties in the chain of endorsements if they fail to fulfill their obligations under the negotiable instrument.
Yes, an indorsee can negotiate a dishonored negotiable instrument, but they should be aware that the risk of non-payment or further dishonor may still exist.
No, in order to transfer their rights, an indorsee must endorse the negotiable instrument, either by signing it or using any other legally recognized form of endorsement.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 16th April 2024.
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