What is the definition of Restrictive Indorsement?
The act of a payee or other holder of an instrument, such as a check, that consists of signing his or her cross upon the back of the instrument contained by order to verbs it to another and wording the signature in such a deportment as to bar the further negotiability of the instrument. For example, the phrases Pay the contents to A one and only, or to A for my use, are restrictive indorsements and terminate the transferability of the document. An indorsement is restrictive if it (1) is conditional; (2) purports to proscribe further verbs of the instrument; (3) includes the terms for collection, for deposit, payment any bank, or similar expressions denoting a purpose of deposit or collection; or (4) states that it is for the benefit or use of the indorser—the one who signs the back of the instrument contained by order to verbs it—or of another person.
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