Blank endorsement of a financial instrument, such as a

cheque A cheque, or check (American English; see spelling differences) is a document that orders a bank (or credit union) to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued. The pers ...

, is only a

signature A signature (; from la, signare, "to sign") is a Handwriting, handwritten (and often Stylization, stylized) depiction of someone's name, nickname, or even a simple "X" or other mark that a person writes on documents as a proof of identity and ...

, not indicating the

payee A payment is the voluntary tender of money or its equivalent or of things of value by one party (such as a person or company) to another in exchange for goods, or services provided by them, or to fulfill a legal obligation. The party making the ...

. The effect of this is that it is payable only to the bearer – legally, it transforms an

order instrument Order, ORDER or Orders may refer to: * Categorization, the process in which ideas and objects are recognized, differentiated, and understood * Heterarchy, a system of organization wherein the elements have the potential to be ranked a number of d ...

("pay to the ''order of'' (the payee)") into a

bearer instrument A bearer instrument is a document that entitles the holder of the document to rights of ownership or title to the underlying property, such as shares or bonds. Unlike normal registered instruments, no record is kept of who owns bearer instruments ...

("pay to the bearer"). It is one of the types of endorsement of a

negotiable instrument A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, whose payer is usually named on the document. More specifically, it is a document contemplated by or consisting of a ...

. 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.Answers.com
/ref> This is also called an ''endorsement in blank'' or ''blank endorsement''.Gordon W. Brown and Paul A. Sukys, ''Business law with U.C.C. Applications'' pp. 491, 929 (McGraw-Hill, 11th ed. 2006). The prevalent spelling in American English is ''en''dorsement; the minority convention, ''in''dorsement, is found in older American documents, although the revised

Uniform Commercial Code The Uniform Commercial Code (UCC), first published in 1952, is one of a number of Uniform Acts that have been established as law with the goal of harmonizing the laws of sales and other commercial transactions across the United States through U ...

Article on negotiable instruments retains the older spelling.

References

Negotiable instrument law {{law-term-stub

See also

References