Special endorsement

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Special endorsement
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Special endorsement specifies the person to whom (or to whose order) the bill is payable (e.g. "Pay X or order"). An endorser, by endorsing a bill, takes on certain obligations to the holder or subsequent endorser[1].

Special endorsement[2]:

  • Indicates specific person to whom endorsee wishes to negotiate instrument
  1. Note that words "Pay to the order of" are not required on back as endorsements instrument need be payable to order or to bearer on front only
  2. Also, note that if instrument is not payable to order or to bearer on its face, it cannot be turned into a negotiable instrument by using these worlds in an endorsement on the back
  • Bearer paper may be converted into order paper by use of special endorsement
  • If last (or only) endorsement on instrument is a blank endorsement, any holder may convert that bearer paper into order paper by writing "Pay to X", above that blank endorsement.

Types of endorsement

Three principal kinds of endorsements can be used: blank, special and restrictive. Blank and restrictive endorsements are most commonly used[3]:

  • Blank endorsement an endorsement consisting only of the endorser's signature. A blank endorsement indicates that the subsequent owner is whoever has the check. If a check with a blank endorsement is lost or stolen, the check can be cashed by anyone who has possession of it. Ownership may be transferred without further endorsement. A blank endorsement should be used only when a person is at the bank ready to cash or deposit a check.
  • Special endorsement an endorsement indicating a new owner of a check. Special endorsement are sometimes known as endorsement in full. Only the person or business named in a special endorsement can cash, deposit, or further transfer ownership of the check.
  • Restrictive endorsement an endorsement restricting further transfer of a check's ownership. A restrictive endorsement limits use of the check to whatever purpose is stated in the endorsement. Many business have a stamp prepared with a restrictive endorsement. When a check is received, it is immediately stamped with the restrictive endorsement. This prevents unauthorized persons from cashing the check if it is lost or stolen.

Methods of endorsement

There are two methods of endorsement[4]:

  1. Stamp as checks from patients and other sources arrive they should be recorded in the ledger and immediately stamped with the restrictive endorsement "For Deposit Only". This is a safeguard against lost or stolen checks. Any endorsement should agree exactly with the name on the face of the check. If the name of the payee is misspelled, the payee usually must endorse the check the way the name is spelled on the face, followed by the correctly spelled signature. Most banks accept routine stamp endorsement that is restricted to deposit only if the customer is well known and maintains an established account.
  2. Signature some insurance checks or drafts require a personal signature endorsement; a stamped endorsement is not acceptable. This is stated on the back of the check. In such cases ask the payee to endorse the check, then stamp immediately below the signature the restrictive endorsement "For Deposit Only".


  1. J. Law 2018, p.235
  2. P.R. Delaney, O.R. Whittington 2010, p.820
  3. C.B. Gilbertson, M.W. Lehman 2008, p.120
  4. D.B. Proctor, A.P. Adams 2013, p.437


Author: Daria Polewka