The effect of a conditional indorsement on the back of an instrument differs from the effect of conditional language that appears on its face.

Question

Quizplus · Accepted Answer

A conditional indorsement on the back of an instrument limits the rights of the indorsee to further negotiate or transfer the instrument until the condition is satisfied. On the other hand, conditional language on the face of the instrument may affect the validity and enforceability of the entire instrument.

The Effect of a Conditional Indorsement on the Back of an Instrument