blank endorsement
Definition
Noun: A signature on a financial instrument, such as a check or promissory note, that does not specify a particular person or entity as the new payee. By leaving the "pay to the order of" line blank, the instrument is transformed into a bearer instrument, making it payable to whoever holds it.
Usage
A blank endorsement is used to transfer ownership of a negotiable instrument simply by delivering it to another person. It is common in everyday financial transactions but carries risk due to its lack of specified recipient.
Examples
- Before depositing the check at the bank, he signed his name on the back, creating a blank endorsement.
- A check with a blank endorsement should be cashed or deposited immediately, as it is as good as cash.
- The contract required a special endorsement, not a blank endorsement, for added security.
Advanced Usage
- Converting a blank endorsement: A holder of a blank-endorsed instrument can convert it into a "special endorsement" by writing "Pay to the order of [Name]" above the signature, thereby restricting payment.
- Risk implication: Creating a blank endorsement on an instrument before it is needed increases the risk of loss or theft, as it becomes negotiable by anyone in possession.
Variants and Related Words
- Special Endorsement (or Restrictive Endorsement) (n): An endorsement that specifies a new payee, making the instrument payable only to that person or entity.
- Restrictive Endorsement (n): An endorsement that includes instructions like "For deposit only," limiting further negotiation.
- Endorsement (n): The general act of signing one's name on the back of a check or other negotiable instrument to transfer ownership or authorize payment.
Synonyms
- Bearer endorsement
- Open endorsement
Related Phrases
- To endorse in blank: The act of creating a blank endorsement.
- He was instructed to endorse the check in blank.
Noun
-
an endorsement on commercial paper naming no payee and so payable to the bearer
Khám phá thêm
Các từ liên quan
Từ đồng nghĩa
