Requisites of a Valid Endorsement If an endorsement is to be valid, it must possess the following requisites: . Endorsement is to be made on the face of the instrument or on its back. It is usually made on the back of a negotiable instrument. .
When there is no space for making further endorsements a piece of paper can be attached to the negotiable instrument for this purpose. This piece of paper is called ‘Allonge’. . If the endorsee’s name is wrongly spelt, the endorsee should sign the same as spelt in the instrument and write the correct spelling within brackets after his endorsement.
. Endorsement for only a part of the amount of the instrument is invalid. It can be made only for the entire amount. 12th Commerce Unit - - .
. AM . Where, however, the instrument has been partly paid, a note to that effect can be given on the instrument and endorsement made for the balance amount. .
Endorsement is complete only when delivery of the instrument is made. On the death of the endorse who has endorsed an instrument but has not delivered it to the endorsee, the endorsement becomes invalid. . It is presumed that the endorsements appearing on a negotiable instrument were made in the order in which they appear thereon.
. Signing in block letters does not constitute regular endorsement. . The prefixes or suffixes added to the names of the payees or endorsees must be omitted in the endorsement.
. Endorsement must be in link . If the payee is an illiterate person, he can endorse it by affixing his thumb impression on the instrument. But it must be duly attested by somebody who should give his full address thereon.
. A person duly authorised to endorse a cheque or a bill must indicate that he is signing in it on behalf of his principal by using such words as “for”, “on behalf of” or “per pro”. Why emergency holidays are declared under Negotiable Instruments Act? Where the maturity date of the negotiable instrument falls on notified public