Legal Definitions - special indorsement

Definition: Special indorsement is the act of signing the back of a negotiable instrument, such as a check, and specifying the person who will receive payment or to whom the goods named by the document must be delivered.

For example, if John Smith receives a check for $500 from Jane Doe and he wants to give the money to his friend, Bob Johnson, he can use a special indorsement by signing the back of the check and writing "Pay to the order of Bob Johnson" underneath his signature. This means that Bob Johnson is the only person who can receive the money.

Special indorsement is different from a blank indorsement, which does not specify a particular person and makes the instrument payable to the bearer and negotiable by delivery only.