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Question
State the essentials of a valid endorsement.
Answer in Brief
Solution
- Truthfulness and Accuracy: The endorsement must be honest and reflect the endorser's true opinion, experience, or results.
- Relevance: It should be relevant to the product or service and based on actual usage or factual data.
- Clear and non-misleading: The endorsement must not be misleading or cause false impressions.
- Disclosure of Material Connections: Any material link between the endorser and the company (such as compensation or free products) must be clearly stated.
- Compliance with Laws and Guidelines: The endorsement must adhere to all relevant legal requirements and industry guidelines, such as those set by the Federal Trade Commission (FTC) in the United States.
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Endorsement of Cheques
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Chapter 7: Banking and Bank Transactions - EXERCISES [Page 126]
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RELATED QUESTIONS
It means signing on the back of the negotiable instrument with the objective of transferring its ownership.
What is endorsement of a cheque?
Discuss various types of endorsement.
What are the general rules governing an endorsement?
Explain five rules necessary for the endorsement of cheques.
