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Simple English definitions for legal terms
indorsement
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A quick definition of indorsement:
Indorsement: When you sign the back of a piece of paper that says someone owes you money, it means you are giving that paper to someone else so they can collect the money instead. It's like saying, "I got paid, and now I'm giving this to you so you can get paid too." This is also called "endorsement."
A more thorough explanation:
Definition: Indorsement, also spelled "endorsement," refers to the act of signing the back of a negotiable instrument to transfer the instrument or acknowledge payment of a debt.
Example: When a person receives a check, they can indorse it by signing their name on the back and then depositing it into their bank account. This act transfers the ownership of the check to the bank, allowing them to collect the funds from the check writer's account.
Explanation: Indorsement is a crucial part of the negotiation process for negotiable instruments like checks, promissory notes, and bills of exchange. By signing the back of the instrument, the indorser is indicating their agreement to the terms of the instrument and transferring their ownership rights to another party. This can be done for a variety of reasons, such as to pay off a debt or to transfer funds to another person or entity.