Endorsement

An endorsement is the signature of a payee on a check. This signature is written before the check is transferred to the payee’s bank. For example, a “for deposit only” endorsement ensures that the payee’s bank must deposit the funds into the payee’s account. If the endorsement is a blank endorsement (such as when it is made payable to Cash), the check becomes a negotiable instrument and can then be used by any other party.

An endorsement guarantees that the signer is the lawful owner of the check, knows of no defect in the document, has received the check in good faith, and can legally transfer it to another party.