What is the difference between a special endorsement and a restrictive endorsement
The act of a person who is holder of a negotiable instrument in signing his or her name on the back of that instrument, thereby
transferring title or ownership. An endorsement may be made if favour of another individual or legal entity, resulting
in a transfer of the property to that other individual o legal entity. There are several types of endorsements: Categories: Types of Endorsements
Endorsement means, “the writing of one’s name on the back of the instrument or any paper attached to it with the intention of transferring the rights therein“. – Negotiable Instruments Act Thus, an endorsement is signing a negotiable instrument for the purpose of negotiation.
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Endorsement MeaningSigning
By
For the purpose of
Types of Endorsement5 different types of endorsement are discussed below:
Blank or General EndorsementIt is a type of endorsement when the endorser just signs on the instrument without mentioning the name of the person in whose favour the endorsement is made. Endorsement in blank specifies no endorsee. It simply consists of the signature of the endorser on the endorsement. Example: A bill is payable to X. X endorses the bill by simply affixing his signature. This is an endorsement in blank by X. In this case the bill becomes payable to bearer. There is no difference between a bill or note endorsed in blank and one payable to bearer. They can both be negotiated by delivery. Special or Full EndorsementIn this type of endorsement contains not only the signature of the endorser but also the name of the person in whose favour the endorsement is made, then it is an endorsement in full. In Special or Full Endorsement an endorsement, it is only the endorsee who can transfer the instrument. Example: A is the holder of a bill endorsed by B in the blank. A writes over B’s signature the words “Pay to C or order.” A is not liable as an endorser but the writing operates as an endorsement in full from B to C. Partial EndorsementA partial endorsement is a type of endorsement in which purports to transfer to the endorsee a part only of the amount payable on the instrument. Such an endorsement does not operate as a negotiation of the instrument. Example: A is the holder of a bill for Rs.1000. He endorses it “pay to B or order Rs.500.” This is a partial endorsement and invalid for the purpose of negotiation. Restrictive EndorsementA restrictive endorsement is one which either by express words restricts or prohibits the further negotiation of a bill or which expresses that it is not a complete and unconditional transfer of the instrument but is a mere authority to the endorsee to deal with bill as directed by such endorsement. Example: “Pay C,“ “Pay C for my use,“ “Pay C for the account of B“ are instances of restrictive endorsement. The endorsee under a restrictive endorsement acquires all the rights of the endorser except the right of negotiation. Conditional or Qualified EndorsementA type of endorsement where the endorsee limits or negatives his liability by putting some condition in the instrument is called a conditional endorsement. A conditional endorsement, unlike the restrictive endorsement, does not affect the negotiability of the instrument. It is also sometimes called a qualified endorsement. Sans recourseEndorser relieves himself from the liability to all subsequent endorsees. FacultativeThe endorser waives any of his rights ContingentThe endorser makes his liability dependent upon happening of some event. Example: The holder of bill endorse it- ‘pay A or order on his marrying B’. In such case, the endorser will not be liable until A marry to B. Business Law Notes(Click on Topic to Read)
Business Law Book References
FAQ Indian Contract Act 1872 The Indian Contract Act is divisible into two parts. The second part (Sections 124-238) deals with certain special kinds of contracts, namely contracts of Indemnity and Guarantee, Bailment, Pledge, and Agency. Also Read: Go On, Share article with Friends Did we miss something in Business Law Note? Come on! Tell us what you think about our article on Types of Endorsement | Business Law in the comments section. What is a restrictive endorsement?Primary tabs. A restrictive endorsement is a conditional guaranty of a transfer of a negotiable instrument. That is, an endorsement that takes effect only on the occurrence or non-occurrence of another act or event.
What is a special endorsement?(a) If an endorsement is made by the holder of an instrument, whether payable to an identified person or payable to bearer, and the endorsement identifies a person to whom it makes the instrument payable, it is a "special endorsement." When specially endorsed, an instrument becomes payable to the identified person and ...
What is the difference between a blank restrictive and a special endorsement of a check?A blank endorsement is simply the name of the person to whom the check is made out. A special endorsement transfers the check to someone else, as in "pay to the order of." A restrictive endorsement restricts what can be done with the check, as in "for deposit only."
What is a special endorsement example?A “special” endorsement allows the payee to make the check payable to another person. For example, if Ms. Smith wants to make the check payable to Mr. Smith, she would write “Pay to the order of Mr.
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