- 16 Jan 2021
special endorsement negotiable instrument
Sec. There are four types of endorsements. Section 15 of the Negotiable Instruments Act 1881, defines the term endorsement as follows: When the maker or holder of negotiable instrument signs the same, otherwise than as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as a negotiable instrument… Signing of an instrument on back, face or slip annexed to it for the purpose of negotiation. Endorsement. - An instrument negotiable in its origin continues to be negotiable until it has been restrictively indorsed or discharged by payment or otherwise. Section 15 defines endorsement as follows: “When the maker or holder of a negotiable instrument signs the same, otherwise than as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as negotiable instrument… ... mentions the name of the person to whom it is endorsed, is known as endorsement in full or special endorsement. A negotiable instrument is a document which entitles a person to a certain sum of money and which is transferable from one person to another by mere delivery or by endorsement and delivery. The presumption under s. 118 of the Negotiable Instruments Act is to be applied between parties to the instrument or those claiming under it. This entity or person is known as the drawer of funds. WHEN NEGOTIABLE INSTRUMENT RENDERED NON-NEGOTIABLE. Usually the endorsement is written on the back of the instrument. A negotiable instrument is a document which entitles a person to a certain sum of money and which is transferable from one person to another by mere delivery or by endorsement and delivery. 3. It can be endorsed by Drawer/ Maker, Holder or Payee is called endorsement under Negotiable Instruments Act, 1881. 1. Continuation of negotiable character. Conditional endorsement: Where the endorser of a negotiable instrument specifies a condition on the endorsement, it is called a conditional endorsement. The special endorsement will also require the signature of the new party to be completely payable, but once that additional signature is affixed to the negotiable instrument it acts as a blank endorsement again allowing for the check to be payable to the bearer under negotiable instruments law. All negotiable instruments have an endorsement that transfers the ownership rights in the instrument to another person or institution. ... mentions the name of the person to whom it is endorsed, is known as endorsement in full or special endorsement. Person making endorsement is called ‘Endorser’ and to whom endorsement is made is called ‘Endorsee’. For an instrument to be negotiable, it must be signed, with a mark or signature, by the maker of the instrument—the one issuing the draft. In case the holder desires to convert general endorsement into special endorsement he has to simply add an order making the instrument payable to a specific transferee. A blank endorsement does not specify a particular endorsee or owner and can consist of a mere signature from the payor to be valid. A negotiable instrument merely gives the holder (1) the authority to demand payment, and (2) the right to be paid. It is also to be noted that under ss. A negotiable instrument contains no promise to perform any duties under a contract, and makes no consequence if the payer defaults, as would a contract. 47.
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