Understanding Endorsements and Acceptance of Bills of Exchange
Classified in Law & Jurisprudence
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Endorsements on Bills of Exchange
An endorsement refers to the transfer of rights using the expression "pay to" or a similar endorsement.
Types of Endorsements
Plenary Endorsement: Conveys all rights of the bill. It has three effects:
- Transfer of Ownership: Transfers ownership of the bill.
- Legitimating Effect: Legitimizes the bearer's possession if it results from a regular chain of endorsements.
- Collateral Effect: The endorser guarantees acceptance and payment. Subsequent endorsees may limit this by:
- Using the clause "not my responsibility," waiving responsibility to their endorsee and everyone else.
- Using the clause "not to order" or "endorse," guaranteeing acceptance and payment only to their endorsee, but not to later endorsees.
Endorsement Limited
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