A blank endorsement is a type of endorsement on a negotiable instrument, such as a check or promissory note, where the payee signs their name on the back of the instrument without specifying a particular payee. This type of endorsement effectively transforms the instrument into a bearer instrument, meaning that whoever possesses the instrument can negotiate or cash it. Blank endorsements are typically used when the payee wants to transfer ownership of the instrument to another party or convert it into cash. However, because the instrument becomes negotiable to anyone who possesses it, blank endorsements can pose a risk of loss if the instrument is lost or stolen before it reaches its intended recipient. Therefore, it is important to exercise caution when using blank endorsements and to ensure that negotiable instruments are handled and transferred securely.
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This glossary post was last updated: 29th March, 2024.
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