restrictive endorsement Primary tabs. The most secure way to endorse a check is to: Write: “For Deposit Only to Account Number XXXXXXXXXX” Sign your name below that, but still within the endorsement … An endorsement signed on the back of a check, note, or bill of exchange that restricts to whom the paper may be transferred -- for example, "for transfer only to Frank Lowry." For Deposit Only—Restrictive Endorsement. For example, the model UCC defines a restrictive indorsement as "an indorsement limiting payment to a particular person…" and bears a signature. Restrictive endorsements may be contained in a letter or note that accompanies a check. § 11-3-206 - Restrictive indorsement O.C.G.A. Definition from Nolo’s Plain-English Law Dictionary. Also spelled "indorsement." (n) Restrict endorsement is the restriction made in a financial instrument whereby its free transferability is restricted to a specific person noted in that endorsement. Restrictive indorsement (a) An indorsement limiting payment to a particular person or otherwise prohibiting further transfer or negotiation of the instrument is not effective to prevent further transfer or negotiation of the instrument. Restrictive endorsement. Search for a definition or browse our legal glossaries. Should an association receive a check with a restrictive endorsement, it essentially has two options: 1) reject the check and continue collecting on the amount due; or 2) cash the check and run the risk of being held to the terms of the endorsement. restrictive endorsement — An endorsement that restricts the negotiability of a document. UCC Codes. This seems to indicate that the credit union's name should be listed in the indorsement to meet the definition of a "restrictive indorsement" under the UCC. Restrictive Indorsement. Source: Merriam-Webster's Dictionary of Law ©1996. If you are a creditor, you now have more latitude in your ability to cash checks that are tendered for less than the amount owed. A restrictive endorsement limits the use of a financial instrument (usually a check). Restrictive endorsement is one which either by express words restricts or prohibits the further negotiation of a bill or which expresses that it is not a complete and unconditional transfer of the instrument but is a mere authority to the endorsee to deal with bill as directed by such endorsement. Published under license with Merriam-Webster, Incorporated. Simply using a memo, restrictive endorsement, or cover letter will not do the trick. The result of a restrictive endorsement is that a financial instrument is no longer a negotiable instrument that can be passed from the stated payee to a third party. Most Popular Terms: restrictive endorsement — An endorsement on a bill of exchange that restricts the freedom of the endorsee to negotiate it … Big dictionary of business and management. Restrictive endorsements are made by signing at the reverse of the instrument by noting the limitations effected there in. Merriam-Webster, Incorporated. A restrictive endorsement is a way of paying an account in a strategic way to improve your credit rating. An endorsement signature on the back of a check that specifies the conditions under which the check can be transferred or paid out. (Examples & Definition) Restrictive Endorsements via endorsement of a check. Accord and Satisfaction - how it creates an agreement. 11-3-206 (2010) 11-3-206. The endorsement area is typically about 1.5” long and covers the breadth of the check. 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