Asked by itzel torres on May 12, 2024
Verified
Once negotiable, an instrument remains negotiable but a restrictive endorsement can limit what is done.
Restrictive Endorsement
A limitation placed on the use of a check that specifies the conditions under which the check can be endorsed or cashed.
Negotiable
Refers to something that can be transferred from one party to another, commonly used in the context of financial instruments that can be exchanged or sold.
- Gain an understanding of negotiability and the defining characteristics that establish an instrument's negotiability.
- Become familiar with the impact that endorsements have on making instruments negotiable and transferable.
Verified Answer
YS
Yusuf Sar?yarMay 17, 2024
Final Answer :
True
Explanation :
A restrictive endorsement can limit the actions that can be taken with the instrument (such as specifying "for deposit only"), but it does not change the fundamental negotiable nature of the instrument itself.
Learning Objectives
- Gain an understanding of negotiability and the defining characteristics that establish an instrument's negotiability.
- Become familiar with the impact that endorsements have on making instruments negotiable and transferable.