Explain four types of endorsement that may be made on a bill of exchange

Explain four types of endorsement that may be made on a bill of exchange

ANSWER

1. Blank endorsement: This is an endorsement which does not specify the person to whom or to whose order the bill is payable. It’s effect is to convert the order bill into a bearer bill.
2. Special endorsement: This is an endorsement which specifies the person to whom or to whose order, the bill is payable.
3. Restrictive endorsement: This is an endorsement which prohibits further negotiation of the bill e.g. a bill endorsed “pay x only”. This gives the right to the endorse to claim payment on the bill but prohibitshim from transferring the right of payment to anyone else.
4. Conditional endorsement: This is an endorsement by which the endorser makes the payment of the bill subject to a condition or conditions or limits or exempts himself from liability if the bill is not honoured.