Indorser: A person who endorses a piece of paper that can be traded for money by signing their name. They are not the original creator of the paper, but they are giving their approval for someone else to use it. In some cases, an indorser may sign as a way to assist someone else in obtaining money, similar to a guarantor.
An indorser is an individual who endorses a negotiable instrument, thereby transferring ownership to another person. The indorser is not the creator, drawer, or acceptor of the instrument. For instance, if John writes a $100 check to Sarah, she can endorse the check by signing the back and then give it to Tom. In this scenario, Tom becomes the indorsee (the recipient of the endorsed instrument), while John becomes the indorser (the person who signed the instrument to transfer ownership). Another example involves Mary purchasing a car from Bob. Since Mary doesn’t have the full payment upfront, she signs a promissory note to Bob for the remaining balance. To assist Mary, her friend Jane signs the promissory note as an accommodation indorser. This means that Jane acts as a guarantor for Mary and promises to pay the balance if Mary is unable to do so. These examples demonstrate how an indorser transfers ownership of a negotiable instrument to another party. In the first example, Sarah endorses the check to transfer ownership to Tom. In the second example, Jane signs the promissory note to assist Mary and pledges to pay if Mary is unable to fulfil her obligation.
An indorser is a person who signs a negotiable instrument, such as a check or promissory note, to transfer ownership to another party.
An indorser is responsible for guaranteeing payment of the instrument and ensuring that it is valid and enforceable.
Yes, an indorser can be held liable for the amount of the instrument if the maker or drawer fails to pay.
Yes, an indorser can transfer the instrument to another party by signing it over to them.
If an indorser’s signature is forged, they may not be held liable for the instrument.
An indorser can be released from liability if they include a qualified or restrictive indorsement, such as “without recourse” or “for deposit only.”
Yes, an indorser can be held liable if the instrument is dishonored, unless they have included a qualified or restrictive indorsement.
Yes, an indorser can be held liable if the instrument is not paid due to the insolvency of the maker or drawer.
Yes, an indorser can be held liable if the instrument is not paid due to a legal defence raised by the maker or drawer.
Yes, an indorser can be held liable if the instrument is not paid due to a breach of contract by the maker or drawer.
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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