Special indorsement refers to the act of signing the back of a negotiable instrument, such as a check, and specifying the name of the intended recipient of the funds. This distinguishes it from other forms of endorsements where the signer simply signs their name without designating a recipient. Special indorsement essentially signifies that the funds are intended exclusively for the specified individual.
Special indorsement refers to the act of endorsing the back of a negotiable instrument, such as a check, and indicating the individual who will receive payment or to whom the goods mentioned in the document must be delivered. To illustrate, if Jane Doe issues a $500 check to John Smith and he intends to transfer the funds to his friend, Bob Johnson, he can utilise a special indorsement by signing the back of the check and adding “Pay to the order of Bob Johnson” below his signature. This signifies that only Bob Johnson is authorized to receive the funds. It is important to note that special indorsement differs from a blank indorsement, which does not specify a particular individual and renders the instrument payable to the bearer and transferable solely through delivery.
A special indorsement is a type of endorsement on a negotiable instrument, such as a check, that specifies the person to whom the instrument is payable.
A special indorsement specifies the person to whom the instrument is payable, while a blank indorsement does not specify a specific payee and makes the instrument payable to anyone who possesses it.
No, a special indorsement cannot be changed or transferred to another person without the consent of the original payee.
No, a special indorsement can only be made on a negotiable instrument, which is a document that guarantees the payment of a specific amount of money.
A valid special indorsement must be written on the back of the instrument, specify the person to whom it is payable, and be signed by the original payee.
Yes, in some jurisdictions, a special indorsement can be made electronically through digital signatures or other electronic means.
Once a special indorsement is made, it cannot be revoked or canceled without the consent of the original payee.
If a special indorsement is forged, the person who made the forgery can be held liable for fraud and may face legal consequences.
Yes, a special indorsement can be made on a joint account if all account holders consent to the indorsement.
If you receive a check with a special indorsement, you should ensure that the indorsement is valid and matches the payee specified. If there are any discrepancies, you should contact the issuer of the check for clarification.
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: 17th April 2024.
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