Question

What is endorsement of a cheque?

What do you mean by endorsement of a negotiable instrument?

Answer 1

1. Endorsement of a cheque means writing something on the back of the cheque with the intention of transferring the rights therein.
2. When the maker or the holder of a negotiable instrument signs the same, otherwise than as such maker, for the purpose of negotiation, on the back or face thereof, 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, he is said to endorse the same and is called the endorser.
3. The person to whom the instrument is endorsed is called the endorsee.
4. The endorsement is done on the back of the instrument.
5. When no space is left on the instrument, the endorsement may be done on a separate slip to be attached to the instrument.
6. This slip is known as 'Allonge'. Endorsement is required when the cheque is payable to the order.
7. A bearer cheque can be transferred by mere delivery, and no endorsement is required on it.