Endorsement

The word endorsement has various definitions depending on the context in which it is used. For example, a signature authorizing the legal transfer of a negotiable instrument between the parties is an endorsement. Endorsements can also be an amendment to a contract or document, such as a life insurance policy or a driver’s license. A public statement of support for a person, product, or service is also considered an endorsement.

What is the endorsement?

An endorsement is the process by which a person can transfer to another the power to perform acts of domain to your name or to transfer ownership of a document. The endorser grants this power to you through the use of a signature that is made on the back of the document that is being signed and endorsed. It allows the transfer of ownership of a document from one person to another.

What is it for

The endorsement serves for the current exchange holder or creditor to assign in favor of another person a bill of exchange or other credit document issued to the order, so that it appears as a form of support , indicating that that new person or someone else on their behalf.

It serves as a means to put into circulation title securities issued such as pay s or bills of exchange , to transfer the ownership of a given document from one person to another, as an effective payment and credit .

Characteristics

The main characteristics of the endorsement are the following:

• It is unilateral because it is a manifestation of unilateral will that does not require the concurrence of other wills or communication to third parties.
• It is accessory because it supposes the existence of a title in order , and this can exist without being endorsed.
• It is unconditional because it is a simple operation that should not be complicated and hindered by particular stipulations .
• It is integral or invisible in the sense that part of the Bill cannot be transmitted to a person, breaking the endorser as the creditor of the rest.
• It is formal as is the issuance of the title, it is a documented act that is extended in the same title of value or in an attached sheet.
• It is an act that is done in writing .

Types

There are different types of endorsement that we mention below:

• Signature Endorsements – When an employer signs a paycheck , they authorize or endorse the transfer of money from the business account to the employee. The act of signing the check is considered an endorsement, serving as proof of the payer’s intention to transfer funds to the payee .
• Insurance Approvals – Insurance endorsements are amendments in the form of modifications or additions to the original policy.  So generally , this type of endorsement increases the policy premium due to benefits additional to the policyholder and (the) beneficiaries and increased risk for the insurer.
• License endorsements : grant additional rights or privileges to a licensee.
• Endorsement in procurement or collection : it does not transfer property, it only grants the endorsee authority to present the document for acceptance , or to process its collection extrajudicially or through the courts if necessary.
• Endorsement in guarantee or pledge : it does not transfer ownership of the title, it only gives the endorsee the rights and obligations of a pledgee regarding the endorsed title and all the rights represented by the same document.
• Blank endorsement : only the beneficiary signs and depending on the number of signatures on the back, this will be the number of endorsements that document had.

How to make an endorsement

In order to make an endorsement, it must be taken into account that the first requirement that you must have is the title that is also called the principle of inseparability. In addition, it must have the name of the endorsee or the person to whom the document is given. This is not an essential requirement, as blank endorsements can be made . The signature of the endorser or of the person signing the endorsement must also bear the phrase ” at your request ” or ” on your behalf .”

How is it different from a collateral?

The guarantee refers to a joint debtor , which means that someone will be responsible for a certain payment as the main debtor, it is a signature that makes a person responsible for paying. The endorsement is a transfer of rights by the creditor.

Examples

Some examples of endorsement are as follows:

• For example, a policy provision that continues monthly income to a beneficiary after the death of the insured is an example of an endorsement and is also known as a rider.
• For example, a driver who gets a motorcycle endorsement on a driver’s license can operate a motorcycle on public roads. License endorsements also refer to the types of vehicles authorized or the type of cargo that a vehicle can carry.