Asked by Jackson Willis on May 10, 2024
Verified
When an instrument is being transferred to an agent or trustee for the benefit of either the endorser or a third party, which kind of endorsement is used?
A) Conditional endorsement.
B) Trust endorsement.
C) Endorsement to prohibit further endorsement.
D) Bearer endorsement.
E) Conditional bearer endorsement.
Trust Endorsement
An endorsement that is used when the instrument is being transferred to an agent or trustee for the benefit of either the endorser or a third party; gives the endorser the rights of a holder.
Agent
An individual authorized to act on behalf of another person or entity in business transactions or legal matters.
- Grasp the effects that endorsements exert on the negotiability and the ability to transfer instruments.
- Acquire knowledge on the differentiating factors between various endorsements and how they affect negotiation and liability.
Verified Answer
AA
Armando AraujoMay 13, 2024
Final Answer :
B
Explanation :
A trust endorsement, also known as a fiduciary endorsement, is used when an instrument is being transferred to an agent or trustee for the benefit of either the endorser or a third party. This type of endorsement specifies that the endorsee (the agent or trustee) is acting in a fiduciary capacity.
Learning Objectives
- Grasp the effects that endorsements exert on the negotiability and the ability to transfer instruments.
- Acquire knowledge on the differentiating factors between various endorsements and how they affect negotiation and liability.
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