Blank endorsement of a financial instrument, such as a cheque, is only a signature, not indicating the payee. The effect of this is that it is payable only to the bearer – legally, it transforms an order instrument ("pay to the order of (the payee)") into a bearer instrument ("pay to the bearer"). It is one of the types of endorsement of a negotiable instrument.
It is "an endorsement consisting of nothing but a signature and allowing any party in possession of the endorsed item to execute a claim."
A blank endorsement is a commonly known and accepted term in the legal and business worlds.
This is also called an endorsement in blank or blank endorsement.
The prevalent spelling in American English is endorsement; the minority convention, indorsement, is found in older American documents, although the revised Uniform Commercial Code Article on negotiable instruments retains the older spelling.
See also
References
- Investor Words web site
- ^ Answers.com
- The Free Dictionary web site
- Gordon W. Brown and Paul A. Sukys, Business law with U.C.C. Applications pp. 491, 929 (McGraw-Hill, 11th ed. 2006).
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