Blank endorsement of a financial instrument, such as a
cheque
A cheque (or check in American English) is a document that orders a bank, building society, 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 person writing ...
, is only a
signature
A signature (; from , "to sign") is a 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 intent. Signatures are often, but not always, Handwriting, handwritt ...
, 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
A bearer instrument is a document that entitles the holder of the document to rights of ownership or title to the underlying property. In the case of shares (bearer shares) or bonds (bearer bonds), they are called bearer certificates. Unlike nor ...
("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.
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This is also called an ''endorsement in blank''[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.
See also
*Banking
A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital m ...
*Bearer bond
A bearer bond or bearer note is a bond or debt security issued by a government or a business entity such as a corporation. As a bearer instrument, it differs from the more common types of investment securities in that it is unregistered—no ...
* Blank cheque
*Draft
Draft, the draft, or draught may refer to:
Watercraft dimensions
* Draft (hull), the distance from waterline to keel of a vessel
* Draft (sail), degree of curvature in a sail
* Air draft, distance from waterline to the highest point on a v ...
* Forged endorsement
*Promissory note
A promissory note, sometimes referred to as a note payable, is a legal instrument (more particularly, a financing instrument and a debt instrument), in which one party (the ''maker'' or ''issuer'') promises in writing to pay a determinate sum of ...
References
Negotiable instrument law
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