Asked by Vaishnavi Mereddy on Jun 04, 2024
Verified
To avoid the risk of loss from theft, a holder can convert a blank indorsement to a special indorsement by writing, above the signature of the indorser, the name of the indorsee.
Blank Indorsement
An indorsement that specifies no particular indorsee and can consist of a mere signature. An order instrument that is indorsed in blank becomes a bearer instrument.
Special Indorsement
An indorsement on an instrument that indicates the specific person to whom the indorser intends to make the instrument payable—that is, it names the indorsee.
Convert
To change the form, character, or function of something to another state or type, often referring to assets or data transformation.
- Recognize the significance and implications of the type of indorsement on the negotiability of instruments.
- Discern between bearer instruments and order instruments, detailing the necessary conditions for their negotiation.
Verified Answer
Learning Objectives
- Recognize the significance and implications of the type of indorsement on the negotiability of instruments.
- Discern between bearer instruments and order instruments, detailing the necessary conditions for their negotiation.
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