Indossament

Indossament refers to the transfer of rights under a negotiable instrument through the act of endorsement. By signing the instrument, the endorser transfers to the endorsee the right to payment and, in some cases, accepts liability for payment if the instrument is not honored. Endorsement is a fundamental mechanism for negotiating instruments, allowing title to pass from holder to holder by signature rather than by sale.

Endorsements can take several forms. A blank endorsement consists only of the endorser’s signature and generally makes the instrument payable to bearer. A special endorsement names a specific person to whom payment is to be made. A qualified endorsement adds words such as “without recourse” to limit the endorser’s liability. A restrictive endorsement imposes conditions, for example “for collection” or “for deposit only.”

The endorsement transfers the instrument’s rights to the endorsee, who may further endorse it to others, creating a chain of negotiation. The endorser may remain liable to subsequent holders if the instrument is dishonored, unless liability is effectively limited by a qualified or restrictive endorsement or by applicable law. The precise effects can vary by jurisdiction, but the general principle is that endorsement negotiates the instrument and, depending on the form, can transfer title and/or limit liability.

In practice, endorsement is central to how negotiable instruments such as checks, bills of exchange, and promissory notes circulate in commerce. It enables transfer of the right to collect payment without requiring a separate assignment of rights.