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LSDefine
Simple English definitions for legal terms
restrictive indorsement
Read a random definition: Directive on Certain Aspects of Electronic Commerce in the Internal Market
A quick definition of restrictive indorsement:
A restrictive endorsement is when someone signs the back of a check or other important paper and writes a special note that limits how it can be used or who can use it. For example, they might write "for deposit only" to make sure that only the person named on the check can deposit it in their bank account. This helps prevent thieves from stealing the money. Other types of endorsements include blank endorsements (when no specific person is named), special endorsements (when a specific person is named), and qualified endorsements (when the signer limits their liability if the check is not honored).A more thorough explanation:
A restrictive indorsement is when a person signs the back of a negotiable instrument, like a check, with a condition or restriction on how it can be further negotiated or transferred. The purpose of a restrictive indorsement is to prevent theft or embezzlement of the instrument.
For example, if someone writes "for deposit only" on the back of a check, it means that the check can only be deposited into the account of the person whose name is on the front of the check. Another example is if someone writes "pay to John Smith only" on the back of a check, it means that only John Smith can receive the payment.
These examples illustrate how a restrictive indorsement limits the negotiation of the instrument and ensures that it can only be used for the intended purpose.