An Endorsement (or Indorsement) is a signature of a person, generally made at the back of an instrument, for the purpose of transfer of rights to another person.
An Allonge is a paper slip attached to a bill of exchange, enabling further endorsements.
Essentials of an Endorsement
- An endorsement must have been a regular endorsement and it should not have been torn and pasted together. At least if the tear appears, it shows an intention to cancel it.
- Cheques and other instruments collected for account f the ostensible payee will not require examination for indorsement, or in the case of dividend and interest warrants for discharge except in few cases.
- Cheques and other instruments payable to a bank to be applied after collection for the credit of a customer's account, they will not require indorsement or discharge by the payee bank.
- Complimentary and courtesy titles should not be used. Ex: Mr., Dr. etc
- Correct spelling of the name should be used
- Cheques payable to illiterate person should be endorsed with their left hand thumb impressions
- Endorsement by a deceased person
- Endorsement by a partnership firm / company
- Joint payees
- Only back of the cheque
- Two contracts