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 the indorser to be valid.
C) It can be negotiated just on delivery.
D) It is considered a bearer instrument.

Question

Quizplus · Accepted Answer

A special endorsement is an endorsement that specifies the person to whom the instrument is to be paid, and it requires the signature of the indorser to be valid. Choice A is incorrect because words of negotiation are not required for a special endorsement, but they are required for a blank endorsement. Choice C is incorrect because a special endorsement cannot be negotiated just on delivery; it requires the indorsee's acceptance. Choice D is incorrect because a special endorsement identifies the payee and is not a bearer instrument.

Which of the Following Is True of a Special Indorsement