endorsement in blank
Noun: A type of signature or authorization on a negotiable financial document, such as a check or promissory note, where the endorser signs the document without specifying a particular new recipient (payee). This action converts the instrument into a "bearer instrument," making it payable to anyone who physically possesses it and presents it for payment.
This term is used specifically in the context of finance, banking, and commercial law. It describes the act of signing the back of a check or similar document, leaving the "Pay to the order of" line blank. This makes the document transferable by simple delivery.
- The check had an endorsement in blank, so the finder was able to cash it.
- For security reasons, it is risky to provide a check with an endorsement in blank through the mail.
- The holder of the note converted it into a bearer instrument by adding an endorsement in blank.
- Creating a Bearer Instrument: An endorsement in blank is the legal mechanism that transforms an "order instrument" (payable to a specific person) into a "bearer instrument." Once endorsed in blank, ownership is transferred by delivery alone, without the need for further endorsement.
- Contrast with Special Endorsement: This contrasts with a "special endorsement" or "endorsement in full," where the endorser writes "Pay to the order of [Name]" before signing, thereby directing payment to a specific new party and maintaining a chain of title.
- Blank Endorsement: A more common, synonymous term for endorsement in blank.
- Endorsement (n): The general act of signing one's name on the back of a negotiable instrument to transfer ownership or guarantee payment.
- Bearer Instrument (n): A document (like a check or bond) payable to the person holding it, often created via an endorsement in blank.
- Negotiable Instrument (n): A signed document that promises payment to a specified person or the assignee (e.g., check, draft, note).
- Blank endorsement
- Open endorsement
- Special Endorsement: An endorsement that specifies a new payee.
- Restrictive Endorsement: An endorsement that restricts further negotiation, such as "For deposit only."
An endorsement in blank carries significant risk because it makes the document equivalent to cash. If lost or stolen, it can be cashed by anyone who finds it. It is generally advised to use a special or restrictive endorsement unless immediately transferring the instrument to a known party.
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an endorsement on commercial paper naming no payee and so payable to the bearer
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