Indorsements

Question 1

Special Indorsement

Answer 1

Names a particular person as indorsee. That person must sign for instrument to be further negotiated.

Question 2

Blank Indorsement

Answer 2

Creates “bearer” paper. Can then be negotiated by delivery alone.

(ex. Just signing name. How most people indorse paychecks)

Question 3

Multiple Indorsements

Answer 3

If indorsed several times, last indorsement controls what’s necessary for further negotiation.

Question 4

Qualified Indorsement/Restrictive Indorsement

Answer 4

Qualified: With words “without recourse.” Limits contract liability imposed on indorsers.

Restrictive: Language added to an indorsement intending to “restrict” it to a certain payer or condition isn’t usually valid.
-Except-
“for deposit” or “for collection” requiring bank collection is valid.

Question 5

Anamalous (Surety) Indorsement

Answer 5

Made by someone who is not a holder but for some accommodation purpose. They become liable on the instrument.