Blank Endorsement Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Blank Endorsement, written in plain English, along with examples of how it is used.

What is Blank Endorsement?

History and Meaning of Blank Endorsement

Blank endorsement is a type of endorsement used in negotiable instruments such as checks, drafts, and promissory notes. In a blank endorsement, the endorser merely signs the back of the instrument and does not specify a particular beneficiary. This type of endorsement transforms the instrument into a bearer instrument, which means that whoever holds the instrument can receive payment from the payer or issuer.

Blank endorsements came into use as law and commerce developed over time. The process of endorsing instruments is a way to transfer ownership rights and negotiability of paper instruments. Previously, the endorsement was required to be specific, naming the person or institution to whom the funds should be paid. However, blank endorsement became prevalent because it provided greater flexibility in the exchange of negotiable instruments.

Examples of Blank Endorsement

1. Suppose John receives a check payable to him for $1,000 but he needs to pay Janet. By endorsing the check with a blank endorsement, John can pass the check to Janet, who can then place her own endorsement on the back and deposit it into her account.
2. A company may issue a promissory note for an outstanding debt to another company. The receiving company may use a blank endorsement to transfer the note to a third party who can then deposit or assign the debt to another entity.
3. A business owner may use a personal check to withdraw cash from the business account. If the bank permits blank endorsements, the owner can endorse the back of the check and get cash from the teller.

Legal Terms Similar to Blank Endorsement

1. Special Endorsement - in this type of endorsement, the endorser specifies the name of the person or entity to whom the instrument is payable.
2. Restrictive Endorsement - a restrictive endorsement limits the use of the instrument to specific uses, such as for deposit only.
3. Endorsement in Full - similar to a special endorsement, an endorsement in full names the payee and may include the signature of the endorser.