Which of the following is true of a special indorsement?
A) It is only considered valid if it includes words of negotiation.
B) It requires the signature of an indorser to be valid.
C) It can be negotiated by delivery.
D) It is considered a bearer instrument.

Question

Quizplus · Accepted Answer

A special indorsement requires the signature of the indorser to be valid. This type of indorsement specifies the person to whom the instrument is to be payable, thus making it different from a blank indorsement, which does not specify a payee and can be negotiated by delivery. A special indorsement does not turn the instrument into a bearer instrument; instead, it becomes payable to the specified person.

Which of the Following Is True of a Special Indorsement