signature on a draft or check by a payee before transfer to a third party. A payee provides such an endorsement when transferring this draft to the payee’s bank. Checks can be endorsed in three different ways. In a blank endorsement, once signed, it becomes a negotiable instrument and can be used as such by anyone. A restrictive endorsementlimits the use of the check to a single purpose. “For deposit only” is written on a check when it is deposited by mail. If the check is lost in the mail and subsequently found, it cannot be cashed. A special endorsementis used to pay someone else. All that is required is to indicate the payee and sign.
signature on the back of a negotiable instrument, such as a check. Endorsement legally transfers ownership to another party. The Uniform Commercial Code (UCC) recognizes five kinds of endorsement: (1) blank endorsementor unqualified endorsement; (2) special endorsement; for example, “Pay to the order of ABC Company”; (3) restrictive endorsement, writing limiting further negotiation, such as “for deposit only”; (4) qualified endorsement, “Pay to ABC Bank, without recourse”; and (5) conditional endorsement, “Pay XYZ Company upon completion of contract.” (Rarely used.) The Expedited Funds Availability Act of 1987 imposes certain restrictions on check endorsements, requiring endorsers to write their names in the top 1 1/2 inches on the back of a check, leaving space for bank endorsements.
written agreement attached to a policy to add or subtract insurance coverages. Once attached, the endorsement takes precedence over the original provisions of the policy. For example, under a homeowners policy an inflation guard endorsement is used so that property damage limits are increased automatically to reflect an increase in the cost of construction in the community. Vandalism and malicious mischief can be added to the Standard Fire Policy through an endorsement.
Advertising: statement by a perceived authority used in a promotion to recommend a product. That authority may be a satisfied customer, a celebrity, or someone with relevant professional credentials, such as a physician who endorses a brand of aspirin.
Fulfillment: signature on the back of a check or other negotiable instrument that transfers ownership of an asset (such as cash) from a maker to a payee.
Direct mail: see ancillary service endorsement.
the act of signing one’s name, as the payee, on the back of a check or note, with or without further qualification; the signature itself.
Example: Figure 65.
offering support or credibility to a statement.
Example: The American Association of Homebuilders endorses the use of brick as a construction material.